Groupon Reportedly Plans Spring IPO
Fresh off its rejection of a $6 billion buyout offer from Google, social "deal of the day" site Groupon is working with bankers to prepare a public offering of stock this spring, according to the New York Times DealBook.
Groupon "discussed a public offering with bankers this week, according to two people with knowledge of the deal who spoke on condition of anonymity because they were not authorized to speak publicly on the matter," DealBook reports.
(Also see: Groupon to Google: No sale)
Should Groupon decided to go ahead with the IPO, it reportedly will target a spring debut.
When the popular discount site turned down Google's $6 billion bid in early December, some may have considered it a blunder. After all, Google was offering nearly twice what the online giant had ever paid to buy another company. Plus Groupon, while the most successful and prominent of web sites providing local businesses in numerous markets a way to draw in new customers with aggressive online promotions, faced increasing competition in a space where the barriers to entry were low. Other sites with a similar business model include Living Social, BuyWithMe and Group Swoop.
Now the banks vying to take Groupon public are throwing around valuation figures in the area of $15 billion.
Groupon this week raised $950 million in investment funding from investors, including Morgan Stanley, Fidelity Investments and T. Rowe Price, according to DealBook, which called it "the largest fund-raising effort ever for a start-up."
After years of low activity, the IPO market for tech companies finally may be heating up. There were reports just last week that professional social networking site LinkedIn was planning a public offering, followed almost immediately by news that social networking giant Facebook was accelerating its IPO plans with an eye toward an April 2012 debut.
A few days ago content crap farm Demand Media filed an amended prospectus for its public offering, reportedly expected later this month.
Based in Chicago, Groupon was founded in November 2008 by Andrew Mason, now 29 years old. After a successful launch in Chicago, Groupon quickly expanded to other cities and now serves more than 250 markets in the U.S., Europe, Asia and South America. Groupon reportedly has 35 million registered users and 2010 revenue of more than $2 billion, though it splits about half that with the local merchants who use the service.
Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.