Deals startup Groupon is going public. The Chicago-based company, which opted for independence rather than be acquired by Google (NSDQ: GOOG), filed with the SEC this afternoon. The number of shares and the price range have yet to be determined, but the initial filing is for $750 million in what it is likely to be one of the biggest tech IPOs this year. CEO Andrew Mason ducked repeated questions about the possibility Wednesday during an on-stage interview at D: All Things Digital but did give some of the reasoning a company like his might go public, including returning money to original investors. (Video highlights embedded below.)
Much like Twitter, which grew as a side project out of failed startup Odeo, Groupon emerged in 2008 from a startup called The Point. Offering one deal a day, in its first year the company brought in revenue of $98 million; last quarter alone it had revenue of $644.7 million with 83.1 million subscribers and 28.1 million Groupons sold. Those subscribers don’t come cheap. Gross profit, one of Groupon’s favorite metrics, was $270 million with a revenue cost of nearly $375 million but Groupon lost $102 million in that same quarter after operating expenses. The accumulated deficit as of March 31: $522.1 million
Mason said at D that Groupon has more than 8,000 employees in 46 countries, largely the result of a relationship-based sales model that requires deep staffing. (The filing says more than 7,000 employees in 43 countries.) That staffing, its marketing model and its international expansion make it Groupon an expensive place to operate. By comparison, Twitter has roughly 500 employees.
Groupon has raised more than $1 billion so far, including $135 million from Digital Sky Technologies and Battery Ventures last year followed by a whopping $950 million round from existing investors and a group including Andreessen Horowitz, Greylock Partners, Kleiner Perkins Caufield & Byers, Maverick Capital, Silver Lake, and Technology Crossover Ventures.
The valuation was reported then to be just under $5 billion. Estimates of Groupon’s potential valuation as a public company go as high as $30 billion.
The most recent tech IPO turned out to be considerably under priced. LinkedIn (NYSE: LNKD) shares more than doubled from its $45 per share price when it debuted May 19 and is still trading at more than $75 a share.