Thursday, June 02, 2011

$750 Million IPO Filed by Groupon

GrouponGroupon, the immensely popular online group coupon service, has recently filed with the Securities and Exchange Commission in order to go public in a $750 million IPO which was underwritten by Morgan Stanley, Credit Suisse and Goldman Sachs.

This filing reveals all of the details on Groupon's financials which, if you have been following the news, have been the subject of some speculation. For the entirety of 2010, Groupon's revenue totaled $713 million. This number was up an astonishing 2300% from the company's revenues in 2009. However, Groupon's revenue in the first quarter of 2011 was $644 million, which perfectly demonstrated how fast the company continues to grow.

The subscriber base for Groupon has also shown a similar trajectory of growth with Groupon pumping out deals to more than 83 million subscribers as of the end of the first quarter 2011. This number is up 50 million from the end of 2010.

Groupon, which has raised over $1 billion in venture capital, has paid a price for this spike in growth, however. As of right now, Groupon is not profitable. In its filing Groupon stated, "We have incurred net losses since inception and we expect our operating expenses to increase significantly in the foreseeable future. We incurred net losses of $389.6 million and $102.7 million in 2010 and the first quarter of 2011."

CEO and Founder of Groupon Andrew Mason recently wrote a letter to the company's shareholders talking about the unprecedented growth, strategy and interesting approach that was also included inthe filing. In a section from the letter, Mason writes, "We want the time people spend with Groupon to be memorable. Life is too short to be a boring company. Whether it's with a deal for something unusual, such as fire dancing classes, or a marketing campaign such as Grouspawn, we seek to create experiences for our customers that make today different enough from yesterday to justify getting out of bed."

The letter went on to say, "If you're thinking about investing, hopefully it's because, like me, you believe that Groupon is better positioned than any company in history to reshape local commerce. The speed of our growth reflects the enormous opportunity before us to create a more efficient local marketplace. As with any business in a 30-month-old industry, the path to success will have twists and turns, moments of brilliance and other moments of sheer stupidity."

This filing by Groupon has been highly anticipated for some time now, even though the hot performance of other recent offerings from other companies like Linkedin and Yandex, the major search engine from Russia, have accelerated the timetable for Groupon. When it makes its debut, Groupon will trade under the symbol GRPN.

Source: Mashable - BREAKING: Groupon Files for $750 Million IPO is news of, for and by SMBs! The Small & Medium Business Magazine!

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