From start-up two years ago, to there being rumours of being in discussions to be bought by Google for $5billion is quite a story. I wondered what was there business plan resource? I looked at their board of directors. Of the nine people listed, nearly everyone seemed to represent an investor.
CrunchBase reports that Groupon has raised some$30million in a Series B round in December 2009 and a further $135million in a Series C round in April 2010. The latter may have been at a valuation of $3billion and bought in new investors so a $5billlion exit seems believable.
CrunchBase sets out the case for Groupon as:
Groupon (www.groupon.com) features a daily deal on the best stuff to do, see, eat, and buy in more than 150 cities around the world. By promising businesses a minimum number of customers, Groupon can offer deals that aren’t available elsewhere.
Groupon brings buyers and sellers together in a fun and collaborative way that offers the consumer an unbeatable deal, and businesses a large number of new customers. To date, it has saved consumers more than $300 million and claims it has generated millions in revenue for the businesses it features.
Groupon originated the concept of using collective buying to get a daily deal on local goods and services, and is an outgrowth of ThePoint.com, an online community launched in 2007 for organizing all forms of group action and fund-raising around a “tipping point” of required participants.
1,000 people work in the Chicago HQ with offices opening round the world. Not one in Cambridge, UK, sadly. In the Daily Telegraph, Rajen Ruparell, Groupon UK director, said Groupon will have around 2.5million UK subscribers by the end of the year. He went on to say that most of the time they are female, they are office workers and they start the day with a chat about “what did you buy, why did you buy it?”.
All linked by Facebook and Twitter to build a large enough group of people wanting to buy a product to justify a fantastic discount.
But a very different business model from the likes of eBay, Google, Twitter and Facebook which provide a structure and the leave the punters to do all the work.
When will a business like this come out of the Cambridge, UK, cluster?
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