Welcome to the age of the stealth IPO.
Groupon, the fast-growing purveyor of online discounts from local businesses, has confirmed through a‚ filing with the Securities and Exchange Commission, that it has authorized a new $950 million financing round. (Groupon&'s plans first came to light earlier this week through a related filing in the state of Delaware, where Groupon is incorporated, discovered and analyzed by VC Experts.)
Of the $950 million, $500 million has already been raised from new and existing investors. New investors, Fortune reports include, T. Rowe Price, Morgan Stanley, and Fidelity Investments &8212' all players one would expect to see involved in an initial public offering.
The funds involved are staggering, ranking among the largest venture-capital financings ever. And an estimated $345 million is going to cash out insiders. It&'s important to note that that&'s an estimate: Groupon is reportedly making a tender offer to buy back up to 15 percent of current investors&' shareholdings. That estimated $345 million could represent the maximum if CEO Andrew Mason (pictured here, in a thoroughly fictional Photoshop), Lightbank&'s Brad Keywell and Eric Lefkofsky, Accel Partners and other prominent shareholders sold a full 15 percent of their holdings.
But it&'s still notable that Groupon is raising a massive warchest and offering to cash out insiders, all without the usual mechanism of an initial public offering.
Here&'s my take: Groupon is satisfying restive shareholders who may wish it had taken Google&'s $6 billion offer, at the same time that it&'s gathering an intimidatingly large cash pile to buy up overseas knockoffs of its daily-deal site and scare off domestic competitors like LivingSocial and BuyWithMe out of the market. Meanwhile, it&'s building a sales force to reach more and more cities and beefing up its technology to personalize offers and satisfy demand from businesses.
And this stealth IPO has one more advantage: There&'s nothing preventing Groupon from doing a real IPO in 2011. If anything, the reassuring cash pile makes it a more attractive investment.
Previous Story: Amazon turns on Kindle ebook lending
Print Email Twitter Facebook Google Buzz LinkedIn Digg StumbleUpon Reddit Delicious Google More&8230'
Companies: Fidelity Investments, Groupon, Morgan Stanley, T. Rowe Price
People: Andrew Mason, Brad Keywell, Eric Lefkofsky
Companies: Fidelity Investments, Groupon, Morgan Stanley, T. Rowe Price
People: Andrew Mason, Brad Keywell, Eric Lefkofsky
Owen Thomas is the executive editor of VentureBeat.
VentureBeat has new weekly email newsletters. Stay on top of the news, and don't miss a beat.
Discuss Add this link to... Bury
Comments