Groupon has had its ups and downs in recent months, but the deal-making site remains one of the most popular app in the US.

But if you’re looking for local savings outside of a state’s top markets, the offerings start to get a little sparse.

The Sioux City startup Qneo is looking to put more of a local focus on savings in smaller markets, starting in the Siouxland area.

How Qneo works

After years of being offered deals on sites that would require traveling to take advantage of them, Qneo founder Lloyd Lee decided it was time to take things into his own hands.

“Because of the scale we’re at—around 170,000 people in Sioux City—I guess it’s not lucrative for them to put money into a place this small,” Lee said. “But I knew there was plenty of business here, and having worked in marketing, I know how expensive it is to get your name out there. I thought I could provide a way for businesses to reach people in the community without spending a lot of money.”

Up to three times a day, Qneo users are sent coupons. They have five hours to go into the app and save the coupon for use within the week. The businesses using Qneo pay a flat fee to be featured on the app, with no fees charged when users download or redeem a coupon.

“What we say we’re selling is real estate on phones,” Lee said. “Businesses are paying rent to have their image and deals on all users phones.”

Expanding Qneo and sharing deals

Until recently, Lee had been doing most of the work at Qneo himself and outsourcing some of his development. He recently added three people to the team, Stacy Orndorff, Katibree Orndorff and Parker Hanen. The trio previously started Sioux City’s Heartland Coffee Co.

“They were already using Qneo, and we started talking about joining together and starting to grow Qneo,” Lee said. “We needed another layer of productivity. They freed me up to focus on building the company and [to] introduce Qneo to different businesses while they focus on social media marketing and such. They know a lot of people and can help to get the word out.”

Qneo recently rolled out a new feature, letting users share deals via social media, texting and email. As users share, they’re entered for weekly prize drawings for gift certificates from Siouxland businesses.

Selling to a new audience

Lee quickly realised that dealing with small businesses means his potential customers might not have a huge marketing budget. Early on, he approached businesses with the offer to use Qneo for free, with the hopes that an uptick in business would prompt them to become paying customers.

“If you don’t have a lot of businesses, people won’t use it, and if people don’t use it, you won’t attract businesses,” Lee said.

What comes next

For now, Lee is trying to shore up as many users as possible, as well as getting more businesses on board to offer deals. Down the road, he hopes to see Qneo expand into other markets.

“”There are about 150 different regions that fit our idea, population-wise,” Lee said “Big picture, I think anybody, anywhere has the potential to have Qneo on their phone. My vision is to be able to divide up larger markets, so businesses can target customers in central Omaha or northern Omaha and hit people right in their backyard.”

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Joe Lawler is a freelance reporter based in Des Moines.