Daily deals giant Groupon might be in talks with several banks to file for an initial public offering later this year that would value the company at $25 billion, according to sources familiar with the discussions.
Groupon works with local businesses to offer steep discounts a4‚¬a4¯‚ sometimes anywhere from 50 to 90 percent. For example, it offered a yeara4‚¬a4„s subscription to car-sharing service Zipcar along with $30 in driving credit for $30 a4‚¬a4¯‚ down from the typical cost of around $115.
The business model has proven it works well. Groupona4‚¬a4„s success has inspired a number of a4‚¬Ame-tooa4‚¬¯ companies that focus on daily deals. Savings.com, for example, launched at the Launch Conference in San Francisco last month and aggregates a large number of deals from multiple sites. But none are more compelling than LivingSocial, which raised $175 million from online retailer Amazon.com in December.
It was clear that Groupon had its eyes set on going public after it spurned a $6 billion buyout offer from Google. The company said it expanded from 1 to 35 countries and grew from 2 million to more than 50 million subscribers in the past year when it announced its most recent funding round.
The daily deal site recently‚ raised nearly $1 billion in a funding round closed in January. The site is backed by venture capital titans like Kleiner Perkins Caufield &' Byers, Andreessen-Horowitz and Greylock Partners. The most recent funding round valued Groupon at roughly $4.75 billion. Goldman Sachs and Morgan Stanley have spoken with Groupon about taking the company public at a valuation of $15 billion, according to the Bloomberg report.
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Companies: Groupon, Livingsocial, Savings.com
Companies: Groupon, Livingsocial, Savings.com
Matthew Lynley is VentureBeat's enterprise writer. He graduated from the University of North Carolina, where he studied math and physics, in May 2010. He has reported for Reuters. He currently lives in San Francisco, California. You can reach him at mattl@venturebeat.com (all story pitches should also be sent to tips@venturebeat.com), and on Twitter at @logicalmoron.
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