Questions swirl around YourCityDeals

Courtney
Courtney Symons
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As YourCityDeals.com deals with dozens of irate customers, angry over the botched sale of prepaid gas cards, the Ottawa-based daily discount site claims it’s secured a $50 million investment.

(Stock image)

If true, it would likely be the largest single investment in several years for a company in Ottawa, where total investment levels have averaged roughly $30 million in recent quarters, according to Canada’s Venture Capital & Private Equity Association.

YourCityDeals.com announced the $50-million of equity line financing from an unnamed “accredited investor” on Nov. 8.

But the news came the same day that YourCityDeals admitted it was unable to honour almost 10,000 deals it had sold on its website: $49 for a $100 Petro Canada gas gift card.

“Our company has over exceeded our capacity with the overwhelming demand, we truly apologize,” the company posted on its Facebook page on Nov. 8. YourCityDeals went on to state that all customers would receive a full refund on the purchase via PayPal.

After repeated attempts by OBJ to contact the company, an in-person interview was scheduled with a spokesperson who failed to show up.

Online forums including Facebook show more than 135 posts from mostly angry customers stating that no one at YourCityDeals answered their calls and that the voicemail box was full.

YourCityDeals launched in 2011 under third-party management, with brand management company Hi Impact Media and local advertising site OttawaKiosk as shareholders.

In July, Hi Impact took on the day-to-day management of the company to deal with “a lot of unanswered complaints,” according to Weggon Allen, a co-founder of Hi Impact and part of the team now running YourCityDeals.

The plan was to integrate the deals site with the services offered by Hi Impact, which has more than 800 customers in its database.

Soon after the change in management, OttawaKiosk sent out an e-mail to those on its mailing list stating that it was no longer affiliated with YourCityDeals.

Equity line financing, the type announced by the company, is a transaction where an investor commits to buying equity securities from the company on a periodic basis or as needed.

A press release issued by YourCityDeals stated that the funds would be used to expand the company nationally and enter 12 new markets.

The Petro Canada gift card is still listed as a “recent deal” on the company’s website, alongside deals for pizza, hair services and clothing.

Organizations: Petro Canada, Venture Capital Private Equity Association.YourCityDeals.com, Hi Impact Media

Geographic location: Ottawa, Canada

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  • Omar
    November 15, 2012 - 16:18

    This sounds completely bogus! Reasons: a) lack of any verifiable information in the news release b) inconsistencies with recent performance of company c) Weggon Allen's Linkedin account notes that he is co-founder/President of YourCityDeals.com up until Sep 2012 yet he is quoted in this article as "part of the team running YourCityDeals". This smells bad just from scratching the surface. OBJ, this is your chance to do some real reporting rather than just re-hashing other people's news releases. Lots of parallels with that other joker company Kahoot.ca whose CEO Ryan Wilby said 70,000 people had already signed up to their service before fleeing Dodge.