You’ve probably heard of Groupon -- but not Groupigg, a St. Louis-based firm piggybacking on Groupon’s success in the daily deals marketplace.

That’s because Groupigg plays a behind-the-scene role in providing the software and support to power a growing list of media companies’ daily deal sites, which offer deep discounts on goods and services on everything from pedicures to carpet cleaning.

It has gone from operating daily deal sites in just a handful of cities a year ago to now being in more than 250 markets, the company touts. And it also recently expanded abroad to South Africa, India, and New Zealand.

Groupigg is among a number of local companies -- including Second Street Media and Real Deal STL -- that have been riding the wave in the expanding daily deal marketplace.

“We found in this space you grow quick or you die,” said Joshua Jennings, Groupigg’s chief executive. “We’ve been fortunate enough at this point to grow quick. This is all really about a land grab for market share.”

But at the same time, some experts wonder if the daily deal market may shake out as many startups fail to gain traction.

Other concerns include too many players in the field, consumer fatigue from too many deals, and the difficulty and expense in increasing the subscriber base.

A recent report from research firm Forrester Research said that daily deals are a “significantly challenged model” because it cannibalizes sales that shoppers would normally make with the same merchants, creates “deal-hunting gremlins” who are trained to purchase only when there are offers, and requires a lot of money to create a large email database.

And questions about the industry’s prospects continued to swirl this week when Groupon came out with fourth-quarter financial results, its first reporting period since going public last year.

The Chicago-based company reported a net loss of $42.7 million as it more than doubled its revenue $506.5 million in the quarter.  Many analysts had expected a small profit.

Nonetheless, St. Louis-based companies like Groupigg are undeterred and optimistic about the future.

In order to be successful in this industry, you need one of two things, Jennings said.

“You need a large pile of money to basically compete in the space because user acquisition is expensive,” he said. “Or you need to be aligned with a very strong player.”

That’s why Groupigg has partnered up with media companies like Cox Media and Newport Television, who already have a loyal audience, an experienced sales staff, and relationships with advertisers, he said. His company employees about 50 people with offices in St. Louis and Seattle. Jennings declined to release the company’s revenue.

Tim Brunette, who launched Real Deal STL in November 2010 with his brother, Joe, said his company grossed $1 million in sales last year.

Now he is planning to expand to 20 to 30 more markets in the next 12 to 18 months and to launch a related travel deals site.

He just announced an exclusive partnership with Funjet Vacations and Travel Haus of St. Louis for the travel site. The company started a similar arrangement with the Pasta House last year after restauranteurs Kim Tucci and Joe Fresta joined the company’s ownership team.

Brunette said he has been contacted by one of the national daily deal companies about a buy out.

“We’re not sure if want to explore that avenue at this time,” he said. “We’ve had a great year and a half.”

The company, which has seven employees, has found a successful niche in offering golf deals. Its biggest sales to date were two related deals in one week for half-priced rounds of golf to Pevely Farms Golf Club that brought in $54,875 from 904 purchased deals.

Consumers are expected to spend $2.5 billion on deals this year, up from an estimated $2 billion last year and $873 million in 2010, according to the research consulting firm BIA/Kelsey. That number is projected to grow to $4.2 billion by 2015.

“It took off on a rocket ship,” Peter Krasilovsky, a BIA/Kelsey vice president, said of the exponential growth of daily deals. “We think it’s leveling off in some ways, but the penetration among the number of users continues to increase. More people are still signing up for these things.”

The deals -- including daily deals and flash sites -- started off as mostly a phenomenon among college-educated women, he said. Women continue to be a large audience, but the demographics are now beginning to broaden out.

With a low barrier to entry and the possibility of big commissions (sites typically take 50 percent of the proceeds), a lot of startups have entered this space. But a number of the smaller players have been dropping off -- a trend that experts expect to continue in the immediate future.

“In order to source your merchant base and to promote your deals with consumers, you really need to have a certain scale,” Krasilovsky said.

And it didn’t help when Groupon began releasing financial statements in preparation of going public last year, he added.

“I think a lot of investors in this space began to get cold feet that even a major player like Groupon was having trouble finding scale and profitability,” Krasilovsky said.

In St. Louis, the number of sites offering daily deals has actually grown to about 22 in the last couple of months from 12 in March, according to the daily deal aggregator Yipit.

Groupon and LivingSocial, which comprise about three-quarters of the North American deal industry, control a larger share of the St. Louis market, Unaiz Kabani, data product manager for Yipit said in an email. Kabani declined to provide local market share figures.

Second Street Media's daily deal business grew from less than 100 media partners to more than 400 in 2011, said the company's co-founder and president, Matt Coen. His firm’s clients include the Washington Post, Miami Herald, and the Post-Dispatch as well as KTVI and KPLR.

“It’s our fastest-growing product at the moment,” he said. “We anticipate doing a lot more in 2012.”

Second Street, which offers a number of products to media outlets, employs 35 people, about 25 of them who work in its downtown St. Louis office. Now the company is planning to hire 10 more employees in the next six months in part because of the growth in its daily deal business, he said.

Coen sees the space evolving into more than just daily deals into deal stores and multiple deals that run over several days. And he’s not worried about the concern that consumers are beginning to tune out daily deals now that their email inboxes are inundated with the offers.

“We see no sign of deal fatigue among consumers,” he said. “Consumers are always looking for a good deal. Certainly in this economy, that’s more true than ever.

“And everybody loves a deal -- that’s not going to change.”