Groupon, the daily deals service, has filed for an initial public offering.
Groupon is seeking to raise $750 million. The company noted in its S-1 filing with the SEC (available here) that the company currently has over 7,000 employees and has provided "more than 1,000 daily deals to 83 million subscribers across 43 countries and have sold to date over 70 million Groupons." The company, which launched in November 2008, has attained this reach, scale and size in 30 months.
"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," Groupon CEO Andrew Mason wrote in his letter to potential investors. "Knowing that this will at times be a bumpy ride, we thank you for considering joining us."
According to the S-1 filing, the company's revenue has grown around 20,000% since June 2009, increasing from $3.3 million in the second quarter of 2009 to $44.2 million in the first quarter of 2010 to $644.7 million in the first quarter of 2011, though Groupon ultimately lost $102.7 million in the first quarter of 2011.
Groupon has faced increasing competition from a growing number of daily deals sites that offer similar services, from Living Social to Google Offers to Glenn Beck's Markdown.com. Critics have suggested that Groupon may have difficulty differentiating itself in the increasingly gutted daily deals marketplace and the company highlighted three elements that it considers its advantage in the marketplace: the "customer experience and relevance of deals," "merchant scale and quality," and "brand."
The company also says of its competitors,
We expect competition in e-commerce generally, and group buying in particular, to continue to increase because there are no significant barriers to entry. A substantial number of group buying sites that attempt to replicate our business model have emerged around the world. In addition to such competitors, we expect to increasingly compete against other large internet and technology-based businesses, such as Facebook, Google and Microsoft, each of which has launched initiatives which are directly competitive to our business. We also expect to compete against other internet sites that are focused on specific communities or interests and offer coupons or discount arrangements related to such communities or interests.
Mason outlined several characteristics that he said defined the company, noting, "we don't measure ourselves in conventional ways," "we are unusual and we like it that way," "we are always reinventing ourselves," and "we aggressively invest in growth."
Groupon is the latest in a string of Internet companies to announce--or spark speculation surrounding--an IPO. Social networking sites Renren and LinkedIn filed for IPO, as did Pandora, a music streaming site.
LinkedIn's IPO may offer some context for Groupon's valuation. To put matters in perspective, LinkedIn's offering price was $175 million and the company's IPO valued it at over $9 billion. Groupon's offering price is $750 million and the New York Times previously reported that the company had been valued at close to $25 billion.
Morgan Stanley, Credit Suisse and Goldman Sachs will be handling the IPO.