Thread: - Think Groupon's Stupid Now? -

Groupon Prepares for Spring 2011 IPO at a $15B Valuation

Unnamed sources close to Groupon‘s financial decisions say the company is talking with bankers about an initial public offering (IPO) that would put the startup at a valuation somewhere between $15 billion and $20 billion.

Turning down a $6 billion acquisition offer from Google (Google) isn’t looking like such a bad idea now.

Groupon has just come off a year of meteoric growth and a record-breaking fundraising stint that yielded a $950 million Series D from investment firms that included Morgan Stanley, Greylock Ventures, Andreessen Horowitz and Kleiner Perkins Caufield & Byers.

Last week, founder and CEO Andrew Mason said, “We’re thrilled that Groupon has earned the confidence of some of the world’s most respected investment firms. With their support, we will continue on our mission to change the way people shop locally and serve the world’s local businesses.”

Today, two sources confirmed to the New York Times that the startup was preparing for an IPO in the spring, meeting with bankers more than once this week.

A successful IPO for Groupon could signal good things for the web startup and VC world. In fact, this is just the kind of splashy exit that many VCs and VC-backed CEOs have been observing in 2010 and predicting for 2011. Still, a Groupon IPO would be a blockbuster by any standards.

While we wait and see if these rumors are true, let us know in the comments what you think of this reported valuation. Is the price right for a local deals site?

Taken from Mashable: Groupon IPO

I friggin' love this company. I hope the rumours are true and they make this happen.

^just further proof of the animal spirits running wild in the stock market. Valuations are so rich and extended but everyday is an up day! With inflation running rampant in food and other commodities like energy, I don't want to see what happens when the music stops!

They make so much bank doing this.

My business has a deal setup with Groupon. During our first month we made an extra ten thousand dollars in our membership program and sold just over five thousand dollars with their two for one admission coupons.

Originally Posted by X2daC

They make so much bank doing this.

My business has a deal setup with Groupon. During our first month we made an extra ten thousand dollars in our membership program and sold just over five thousand dollars with their two for one admission coupons.

A deal of the day or a Groupon Store? Either way, that's great!

Groupon is smart. Investors are stupid.

My understanding of one of the reasons why they turned down Google's offer was they wanted to keep control and run things their way indefinitely.

My indirect experience with venture cap is that it's not all roses. The control you once loved is/can be lost and the passion for "your company" can be stripped if the investing group meddles too much.

I have no idea how things are for Groupon with their investors, but with the sums of money being dumped in, I'm guessing their noses are deep in groupons..

I've been preaching against these idiotic valuations for Groupon for some time now on L4P, since there is absolutely nothing Groupon does that can't be easily replicated by anyone else with a subscriber base (and at a lower cost). The biggest fear that Groupon would have is an entity with an even larger and more prominent subscriber base entering the market, such as Facebook or Google.

Well lo and behold, that's coming to fruition:

Facebook tests Groupon-style Deals in San Francisco, four other cities : The Technology Chronicles

If/when Google jumps in (and why wouldn't they, when everyone is looking to juice their bottom line with an infusion of quick revenue and profits), Groupon will face ever-increasing competition and pressure on their margins. The investment banking community hasn't historically been the brightest when it comes to technology plays, but it does know when to take heed of a increasingly competitive marketplace with bigger, established players jumping in to the game.

The $25B valuation that was being bandied about a couple months ago would have made Groupon's IPO larger than Google was when it went public in 2004. And we all know that search is a bit more difficult of a field to compete in than online coupons/discounts. I'd be flabbergasted if Groupon gets anywhere close to that number if/when it finally does go public. If they do, then I'll be monitoring the situation closely to short the hell out of them......

Groupon will be crushed by Google's Groupon

I agree with all comments here. WAY over valued. If/when they IPO, I'll be shorting the hell out of it. This bubble will burst. As said above. A huge aspect that VCs should/normally look at is the defensibility of the business model. It is non-existant here.

FB is going to kill Groupon.