JPMorgan Chase & Co. (NYSE:JPM), one of the major in world financial services has agreed to buy Bloomspot Inc, for $35 million as JPMorgan Chase & Co. (NYSE:JPM) plans to give its credit card holders more discount and offers for local shops and vendors, reported by a memo obtained by Bloomberg News.
Bloomspot Inc., a closely held company which competes with leaders in web-coupon business Groupon Inc. (NASDAQ:GRPN), deals on coupons giving best offers and discounts to high end luxury spas, restraints and weekend getaways. CEO of Bloomspot, Jasper Malcolmson said in a memo e-mailed to Bloomspot’s investors that after the deal with JPMorgan Chase & Co. (NYSE:JPM) is through 100 officers of Bloomspot will engage into the credit card business unit.
This deal came through in a market where in online coupon websites are losing their sheen as Groupon Inc. (NASDAQ:GRPN), largest online coupon vendor have seen a 76% decline in its share prices and Livingsocial Inc., the second largest coupon vendor has already announced its plans to cut down on jobs.
Bloomspot, a San Francisco based company, had raised its capital of $35million from venture capital firms like True Ventures, Melno Ventures, Columbia Capital and $5 million of venture debt from Western Technology Investment making Bloomspot a $40 million company, as reported by the statements submitted by the company last year. Malcolmson, CEO for Bloomspot wrote in the email to its investors that “after the deal is through the investors of Bloomspot will receive a 67% return on the capital invested” by them. The deal is like to come through in January as told by him.
JPMorgan Chase & Co. (NYSE:JPM)’s move to takeover Bloomspot is seen as a way for the company to compete with the already existing financial service providers like American Express and Bank of America who already have a similar online platform for its credit card customers to redeem their coupons online.
When tried to ask Paul Hartwick, a spokesman for JPMorgan Chase & Co. (NYSE:JPM), he refused to comment on the deal. Lily Shan, Chief marketing officer at Bloomspot also did not respond to the voicemail made to take her views on the deal reported by Dow Jones earlier.
Shares of JPMorgan Chase & Co. (NYSE:JPM) were down by 0.18% to close at $43.92. Shares of Groupon Inc. (NASDAQ:GRPN) were down by 3.94% to close at $4.63.