GroupOn Targets $15 Billion Valuation Through I.P.O.


Online Daily Deal business Industry seems to be riding high specially when industry Titan GroupOn is accelerating its expansion plans across the globe. After recent acquisitions in many countries, including India, Group is gearing up for another significant milestone for the start-up which will surely establish Groupon in the list of most acclaimed public sector companies. As per the sources, Company is in talks with few bankers to float an I.P.O. with augmented valuation of $15 Billion.

Indeed, it’s going to be a challenge for the company as well associated bankers to raise the company’s valuation till such extent through public offering. However, Industry experts feel that considering the past recital, financials and future business potential will surely relax such intricacy. Groupon, the social buying site that recently spurned a $6 billion offer from Google, has witnessed the exponential growth in just two years of existence.

The company, which just raised a record $950 million from big investors, discussed a public offering with bankers this week, according to two people with knowledge of the deal who were not authorized to speak publicly on the matter. Banks are pitching Groupon on dizzying valuations at which they expect to take the company public, with many at $15 billion to $20 billion, these people said.

Groupon, which is expected to make its debut in the spring, is prepared to meet with bankers again on Friday, according to the source.

Led by young founder Andrew Mason, whose quirky personality has helped shaped the site, GroupOn has completely transformed the online shopping experience in many company with the power of bulk negotiation. In less than three years, company currently serves to more than 50 million users and stand with annual revenue of $1 billion. Following the success of Groupon, with in few months of its inception, hundreds of clones have been cropped up in many other countries replicating the Groupon business model.

The offering, which would also be among the most anticipated since Google’s in 2004, would also represent the highest valuation of the company to date.

Groupon, analysts say, may be moving quickly to take advantage of the market’s momentum and the excitement around fast-growing Web companies. “It’s smart to strike while the iron is hot, and they’re the most visible and fastest-growing player in their market,” Mr. Sterling said. “To wait a year would inject a level of uncertainty for the proposition of going public.”

During the frenzied period of Web-Start-ups, Groupon latest move will boost the confidence of investors in other promising startup. Recently, Twitter has been valued worth $4.1 billion during latest round of $200 million investment. Social networking Titan Facebook has started the year with $50 billion valuation. Linkedin, a professional networking website is expected to file a prospectus with regulators by the end of quarter.

Consequently, Groupon’s latest initiative towards public offering will raise the pressure on Facebook which is under intense pressure of disclosing its financials after latest round of investment by Goldman Sachs. Though, Facebook is expected to go to public by 2012, but another similar development, especially after Linkedin I.P.O. clearance, company may have to revise its plans for public discloser, as per industry experts.

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