Groupon is the latest U.S. consumer web company to be anointed with an investment from the Russian firm Digital Sky Technologies, which gave Facebook and Zynga huge chunks of money last year to help them avoid having to go public by buying up employees’ shares. The collective buying site has now officially taken $135 million from DST and Battery Ventures, valuing it at more than $1 billion, Kara Swisher reports tonight with an early copy of the press release. TechCrunch had the first report on the deal last week.
Chicago-based Groupon said it will spend the money on its global expansion (it’s currently only in the U.S., though it wants to be in 100 cities by the end of 2010) as well as cashing out employees and early investors. It has now raised more than $170 million, and has previously projected revenue of $100 million for 2010. More than 4 million Groupons have been bought so far, amounting to savings of more than $150 million (provided people actually used the coupons they paid for, that is).
Groupon’s group coupon product is similar to those of bubble-era companies Mercata and MobShop, but it comes at a time when far more people are online and comfortable spending money there. It faces scores of copycat competitors, including some that are doing a better job of harnessing social incentives and one, Tippr, that has bought up significant intellectual property around collective buying from the failed Mercata. However, Groupon is far and away the current leader.