TeamBuy raises $5 million to expand its social buying service

Toronto-based social buying company TeamBuy has closed a $5-million round of financing, it announced today.

The proceeds, raised from existing shareholders in the private company,will be used to shore up Teambuy‘s newly launched servicestargetingshopping categories for homes, kids and babies. The money will also gotowards expanding TeamBuy’s existing deal categories: local, productsand travel.

The size of the financing is notable by Canadian standards. Forexample, theaverage amount of venture capital raised by Canadian companies lastyear was $3.4 million per firm, according to 2011 year-end statisticsfrom theCanadian Venture Capital and Private Equity Association.

TeamBuy was founded two years ago as a daily deal site but hasrebranded itself as more of a social media shopping network that allowsusers to combine their group purchasing power in order to getdiscounted prices on items. It launched an e-commerce app on itsFacebook page last October. TeamBuy’s online deals service is localizedin nature and operates in 20 Canadian cities. In addition to recentlyadding new deal categories, the company plans to introduce a customizedemail service to further personalize services for users. It’s also workingon providing its partner merchants with tablet and mobile TeamBuy appsto make for an easier deal redemption process.

The company has racked up some major interest from retailers likeAmerican Apparel, which partnered with TeamBuy during the 2011back-to-school and holiday shopping seasons. The two promotionsresulted in over 30,000 “buys” worth almost $800,000 in revenue,TeamBuy said in a news release.

It’s not the first cash infusion TeamBuy has landed. Its 2009 pitch onthe CBC TV reality show Dragon’sDen generated investment offers fromseveral of the judges. And last July TeamBuy announced it had raised $7million from an undisclosed institutional investor.

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