BlueKoko secures investment from David Atherton for Groupon Clone

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Extract from The Business Desk NW

DABS.COM founder David Atherton has invested in a new online venture aimed at offering small and medium-sized leisure, travel and beauty businesses a better deal than they currently get from the major group buying sites.

BlueKoko will harness the same group buying model used by sites such as Groupon, KGB and Daily Deal, but Atherton said it would also offer a fairer return and more support to the companies selling their wares.

He argues that companies which have to pay commission rates of 35-50% on top of deeply discounted deals would eventually find the model to be unsustainable.

He said: “ rode on the wave of the internet in the noughties, when we all wanted to buy our goods cheaper and faster online. Today social networks have put the pricing power firmly in the hands of consumers and merchants are losing control of their businesses and profit.

"The big players seem to have blitzed the hospitality and beauty care world with a 'one size fits all' strategy, and of course the very high commissions that you expect to see in an oligopoly. Not only will charge less - and to get going we are doing each retailer's first offer commission-free (excluding card charges) - but we aim to add the same kind of extra value that an advertising agency would."

He said that it would not seek to take any upfront revenues from businesses which signed up to its site but would operate on a revenue-sharing business.

He also said the site would give businesses more control over how and when they ran deals.

Atherton has re-invested around £8m of the £30m he earned from the sale of in a variety of ventures including online, property, biotech and leisure investments. Most of his new investments are being made through Atherton Clarke - an investment vehicle set up alongside accountant Alex Clarke.

He said: "With a large sum of money to invest post-Dabs, I was always attracted to new start-ups and new ideas, rather than ploughing all my money into a single entity. I particularly like as they are following a recent, but clearly vibrant trend, group buying - a proven e-commerce concept."