User:Wojciker/MyCityDeal

MyCityDeal is a collective buying power, deal-of-the-day website that is focused on bringing discounted price deals in the lifestyle and leisure sector to UK and European markets. Originally founded in Berlin as CityDeal in December 2009, the CityDeal collective now serves Germany, France and the United Kingdom.

The idea and concept, a form of social movement known best as collective action, was realized by entrepreneur and CEO Christopher Muhr and COO Benedickt Franke of Rocket Internet. Collective Action was first discussed by Mancur Olson Jr. in his 1965 book The Logic of Collective Action: Public Goods and the Theory of Groups and the idea of collective, online buying is loosely based on these theories.

Collective Buying Business Model
Collective buying allows for direct cost savings, both for the consumer as well as the business. Consumers participating in on-line buying reap the benefits of discounted prices for restuarants, spas, attractions, hotels, etc., while organizations can save money by directly reaching target markets. Participating members further benefit through "networking opportunities and shared knowledge" which over time can build a tipping point of group puchasing power based on a growing number of active participants.

MyCityDeal uses an assurance contract platform to ensure that retailers are able to offer quantity discounts through a viable sales platform. In doing so, users or consumers are protected from the free rider problem where individuals looking for a "free ride" ride the discounted savings of others who paid to bring the deal-of-the-day to the actualization threshold. Rather, users are only charged when the required number of people sign up.

Funding
MyCityDeal is backed by several investors, including Germany's Holtzbrinck Ventures and the Samwer Brothers, as well as German-based Rocket Internet.

Marc, Oliver and Alexander Samwer are known as the founders of online auctioneer Alando, which they sold to eBay in 1999 for $54 million. The three brothers were also were behind Jamba!, a mobile content company they sold to VeriSign for $273 million in 2004. Other notable Samwer investments include Facebook and LinkedIn.

Holtzbrinck Ventures are focused on, but not exclusive to, online investments in the entertainment, e-commerce and online network sector. Previous investments include sites such MyHammer and Seatwave and extend to a portfolio of more than 60 companies.

The Samwer Brothers and Holzbrinck Ventures had previously worked on other investments such as Erento and GratisPay.

Rocket Internet is a German based investment company whose projects and developments are centered around internet and mobile start-ups. Among numerous other investments, and as part of the Samwer incubator, Rocket Internet holds a 59% stake in all of Germany's on-line greeting and e-cards.