Groupon is a Coupon Service that is More Like a Group Hug
By Azam on April 20, 2010
Groupon the coupon vendor has amassed a massive round of funding 135M from Digital Sky Trading. The sky high valuation is a large wager on social network buying. Groupon is based on the simple premise of offering a discount to a group of buyers who sign up together. The firm thepoint.com initially struggled with the business models and built an ecommerce model based on social group buying. Groupon ends up with 1B valuation based on the recent funding and linked to Digital Sky Trading that has made previous investments into facebook and Zynga.
Groupon leverages group buying and social media to provide its millions of customers big discounts on the best local businesses in more than 50 cities across the United States and in Canada. To date, customers have purchased over four million Groupons on deals ranging from spa treatments and golf outings to fine dining and skydiving and have collectively saved over $150 million on these deals.
“Our growth is a reflection of the positive impact Groupon is having on consumers and businesses at a very early stage of the market development,” said Andrew Mason, founder and CEO of Groupon. “We are very pleased and excited to welcome DST and Battery as shareholders and we look forward to benefiting from their vast knowledge and experience of the social media sector as we continue executing on our growth plans in North America and globally.”
“This investment underscores our view that social networking and community based activity will drive, shape and define the web’s evolution in the years ahead,” said Yuri Milner, Chief Executive of DST. “Groupon, with its strong management team, offering and vision, is pioneering social commerce and is redefining the local advertising space. We look forward to being long-term partners of a company that is on a path to becoming a global Internet leader.”
“We’ve followed the social commerce phenomenon for many years, and are thrilled to have the chance to back such a visionary management team,” said Roger Lee, General Partner, Battery Ventures. “They saw a massive opportunity very early, and have executed flawlessly to define it and take the leadership position. We think there is a lot of runway ahead, and are energized to support the team in their quest.”
Founded in November 2008, Groupon has been aggressively expanding to cities throughout the United States, with plans to be in 100 cities by the end of 2010.
Categories : Media & Ads, Tech, viralTags : Andrew Mason, Battery Ventures, Coupons, Digital Sky Trading, DST, Facebook, Groupon, Social Buying, Zynga