What do you get when you cross Groupon with a porn site? FriendFinder Networks is about to find out.
The Penthouse publisher and adult social network operator is buying the operator of Jigocity, an Asian daily deals service, for up to a hefty $65 million.
The transaction is facilitated using FriendFinder stock and warrants. The company, run by CEO Marc Bell, raised $50 million in its May IPO but is still loss-making and its share price has since dropped 65 percent.
JigoCity does deals in over 20 cities in Australia, Hong Kong, Singapore, Malaysia, Taiwan, China, South Korea, Brazil and Los Angeles. It made $600,000 in revenue in July and $1.1 million in August. It has over a million members and plans to add up to four new countries by year’s end.
The space is set to explode in China. But that explosion could have casualties – this report says China alone has over 5,300 daily deals sites, and none of the leading 10 are profitable.
FriendFinder says “JigoCity will retain its brand identity while benefiting from FriendFinder Networks’ website traffic and vast user base.”
FriendFinder operates several dating and sex websites including AdultFriendFinder.
FriendFinder’s previous incarnation, General Media, was owned by Penthouse International before it entered Chapter 11 restructuring.