Got Funds? Groupon Collecting $950 Million
ADOTAS – And you guys thought Twitter’s latest $200 million investment round was crazy — according to an SEC filing and inside sources, Groupon has raised $950 million in its latest round of funding. Even more interesting, adviser Allen & Co. believes founders Brad Keywell and Eric Lefkofsky will take the cash off the table and use it to cash out existing investors.
The deal, which will be completed in a few weeks, will result in a valuation anywhere from $4.75 billion to $7.8 billion — depending on who you talk to. Groupon, which has raised $171 million in venture funding, also took all the $131 million raised in its last round off the table.
Groupon filed that it is seeking to issue 30.1 million preferred shares at $31.59 for a total $950 million. Before turning down Google’s $6 billion acquisition offer, Groupon acquired three companies in new international markets.
It also hired former Amazon Vice President of Finance Jason Child as its new chief financial officer, which some analysts believed signaled an imminent IPO. However, Bloomberg’s insiders called it when they said saying the daily discounter was searching for another round of funding first.
If the Groupon founders really are buying out existing investors, it’s a confusing move. Even though the daily discounter has witnessed incredible growth this year, CEO Andrew Mason seemed to admit recently that its business isn’t sustainable.
So what on earth is going on with Groupon? Is it on track for an IPO or something completely different? Will it continue to expand its offerings, such as the recently previewed Groupon Stores?
Reader Comments.
It’s a logical step for Groupon. With giants like Google and Amazon joining this game, money is very important for them to maintain their current market leader status. However, one of the problems Groupon facing is that it’s the products or services that the buyer cares the most. With the increasing number of deals offered, buyers can just visit a daily deal aggregator like http://www.shopway.com to check all the available deals easily. As a user, it makes absolutely no difference to me if I get an email from Groupon, LivingSocial, or ShopWay telling me about a deal, since I’m after the deal itself. With all of these clones coming up, Groupon’s model runs the risk of becoming a commodity.
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