17 March 2011

Groupon: A $25 Billion Company?

17 03 2011 - At the start of the year, two-year-old daily deals site Groupon was said to be preparing for a spring initial public offering at a $15 billion valuation. Two months later, Bloomberg is reporting that Groupon is in talks with bankers and could IPO with a valuation as high as $25 billion.

image Groupon raised eyebrows when it turned down a $6 billion acquisition offer from Google in December 2010. The startup then went on to raise $950 million in a Series D round — including funding from Starbucks CEO Howard Schultz’s investment firm — with an estimated post-money valuation as high as $7.8 billion.

Could Groupon be worth $25 billion by the time it IPOs later this year? It’s hard to say. (Groupon declined to comment.) The report in question cites unnamed sources and sheds very little new light on Groupon’s financial well-being — it does add that Groupon now has 70 million members across 500 markets.

We do know that Groupon generated $760 million in sales in 2010, according to a leaked internal memo from CEO Andrew Mason in February. Plus, rumors at the time of the Google acquisition talks had it that the company’s annual revenue run rate was $2 billion.

The technology world was first stunned less than one year ago when it was revealed that Groupon was worth $1 billion. Should Groupon’s $25 billion IPO come to fruition, it will be larger than Google’s $23 billion market value at the time of its offering, making Groupon’s meteoric rise nearly unparalleled.


No comments: