Groupon Divests Breadcrumb to Upserve: RIP Platform Dreams

Groupon’s vision of using Point of Sales to position itself as a “Local Operating System for Commerce” is effectively over, with the divestiture of its Breadcrumb Point of Sales division to Upserve, the Providence-based restaurant loyalty and analytics company formerly known as Swipely. Groupon had purchased Breadcrumb in 2012.

Thought to be worth $100 million by Piper Jaffray analyst Gene Muenster in April 2015, Breadcrumb is being given to Upserve in return for an undisclosed minority position. Groupon – which has been taking cash for other divestitures, such as for South Korea’s T-Mon — has a similar ownership interest in Serviz, a southern California home services marketplace.

Rumors of Groupon’s efforts to unload the division have surfaced since spring 2015. By that time, Groupon’s hopes of making POS an anchor for a broad commerce platform were clearly not realistic.

Groupon’s concept for the platform, however, was a bold one: a virtuous circle of deals, marketplace goods, payment processing, services and analytics. Groupon’s recent (and ongoing) push into delivery via its purchase of Order Up was also thought to strengthen its value proposition for restaurants. Most of all, a robust POS-based system would provide long-term stickiness with its merchants. At the same time, it would also position Groupon as a platform player against a set of diverse, more blue chip players such as Amex, Verifone and First Data.

Ultimately, Breadcrumb’s technology may have been good at restaurant analytics and management — it will complement Upserve’s capabilities. But from a marketing perspective, it has been limited. Groupon wasn’t able to leverage the technology to win restaurants accounts.

Upserve won’t confirm how many customers it gets with the acquisition, but it may have involved fewer than 2,000. Before the deal, CEO Angus Davis told us last month that it had “thousands” of restaurant clients. In a press release, Upserve says that it will now have 6,000 total.

Does the divestiture of Breadcrumb have broader implications for the future of POS-based loyalty and offers programs – including card linked offers? We have seen people in the industry contend that loyalty programs and analytics have moved away from explicit programs such as card linked offers towards implicit programs (experiences, etc.)

Given Groupon’s other distractions, however, we would not draw such broad conclusions. While we anxiously await reports of success in this category, there is still a lot of activity: First Data’s Clover, for instance, continues to leverage its relationship with the Perka loyalty program; Belly, FiveStars, Edo, Linkable and Affinity continue to build up their loyalty efforts; and companies like Empyr are also using POS as part of their Online to Offline marketing programs.

Breadcrumb’s Interface

3 thoughts on “Groupon Divests Breadcrumb to Upserve: RIP Platform Dreams

  1. Hi Chris: While payment processing and analytics would have seemed synergistic with food delivery, Groupon has kept it separate. CEO RIch Williams has been betting big on food delivery as a growth vertical.

  2. Interesting… one of the many flaws with the current food delivery model is the restaurant running two separate systems. On paper it seemed smart to combine them. I guess the reality looked different once they got in.

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