After spurning Google's $6 billion offer
, the online coupon site Groupon is now raising
its own wad of cash--$950 million worth. Depending on how the round
closes, this could be the largest equity financing round since Pixar in
1995. VC Experts, a website that provides data on private companies, estimates
that this values Groupon at a towering $6.4 billion. TechCrunch puts
it at $4.75 billion. In any case, the Chicago-based start-up is clearly
looking to expand aggressively into more local markets. Here's what
tech bloggers are saying:
- This Is Big, writes Lucian Parfeni
at Softpedia: "It is the largest funding round ever approved. Depending
on how it closes, it may be the largest venture capital funding round
to date, shadowing Pixar's $500 million round of 1995."
- The Money Will Fund Groupon's Expansion Overseas, writes Erin Griffith
at VC Experts: "Groupon CEO Andrew Mason has tamped down speculation
over IPO plans, emphasizing overseas expansion instead. And now we know
how they plan to finance that expansion."
- What's Next for Groupon? "Groupon
will make a decision next year on whether and how soon to proceed with
an IPO, a person familiar with the company said earlier this month,"
reports Adam Satariano
at Bloomberg. "Groupon is trying to get a bigger piece of the U.S.
local-advertising market, which may reach $133 billion this year,
according to consulting firm BIA/Kelsey in Chantilly, Virginia."
- Only $950 Million? asks Pascal-Emmanuel Gobry at Business Insider. "The valuation seems low," he explains:
Groupon recently hit a whopping $2 billion run-rate
in gross merchandise sales, which probably means around $1 billion in
revenue. For a high-growth, profitable startup like that, you would be
talking about 10X revenue, at least. Facebook is trading in private
markets at more than 20X revenue and has less user growth upside left --
these are very different businesses of course (Facebook has network
effects, for starters) but 4/5X revenue for a startup with Groupon's
growth and profits seems low.
- These New Investors Got a Good Deal, observes Owen Thomas at Venture Beat:
Groupon’s new investors appear to be getting better terms than DST, the
Russian Internet holding company that invested $135 million in Groupon
in April. DST’s investment was junior to other previous investors,
meaning that in a sale, DST would be last in line to recoup its
investment. The new investors would be senior to earlier investors, a
more usual arrangement, but DST has become well-known in the industry
for its willingness to invest in Internet companies like Facebook and
Groupon on liberal terms.
- Media Companies Should Invest in Groupon, writes Tricia Duryee
at All Things Digital: "Newspapers, specifically, have been hard hit by
a shift in local advertising and classifieds. A Groupon partnership
could make it less appalling that they’ve missed yet another trend."
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