Groupon Inc, an individual investor group and two of ReachLocal Inc's original founders led the $10.7 million funding round for online home services provider ClubLocal, a statement about the financing said.
The initial investment is $7.5 million with Groupon having the option to add another $3.2 million in the next twelve months. The deal is part of ReachLocal's move to transfer the ClubLocal operations to a new owner in return for a minority stake. The transaction came after the expiration of the go-shop announced by ReachLocal last December, the statement said.
Even if ClubLocal was introduced only in August 2012, it had already undertaken and finished 11,000 home repair jobs. From its home turf in Dallas, the startup was also able to offer its services in the San Francisco Bay area and unveiled plans to make the service available in other cities in the US soon. Proceeds from the round will be deployed to grow the firm's geographic reach. It will also be used to expand its network of professional service providers. Moreover, part of the funds will also go towards speeding up the introduction of more unique features to ClubLocal's mobile booking and transaction platform, the statement said.
ClubLocal CEO Zorik Gordon said in the statement, "The shift to the online booking and buying of home services is a huge market opportunity that we are proud to be pioneering. We are extremely excited to have the experience of our investor group as we move to the next phase of our company, in particular the strong consumer presence that Groupon brings to ClubLocal. We believe that this round of financing firmly positions us as a well-funded, independent company that can more aggressively pursue this huge market opportunity."
Delaware-based corporation Serviz Inc will now be the owner of ClubLocal Llc which will hold its headquarters in Encino, California, the statement said.
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