Groupon Less Than `100% Committed' to IPO, Chief Executive Mason Says

Groupon Inc., which last month rejected a $6 billion takeover offer from Google Inc., isn’t convinced it will sell shares in an initial public offering anytime soon, said Chief Executive Officer Andrew Mason.

The biggest daily deal website’s commitment to proceeding with an IPO this year is “less than 100 percent, that’s for sure,” Mason said in an interview at the Digital-Life-Design conference in Munich. “An IPO is something we are considering, but we’re just trying to learn more about the option at this point and understand the benefits and drawbacks.”

Groupon, based in Chicago, sells users discount vouchers for goods and services. It estimated this month that it will get $573.1 million of gross proceeds from an investment round, according to a regulatory filing. The company is also talking to Goldman Sachs Group Inc. and Morgan Stanley about an IPO, people familiar with the discussions have said.

Earlier in the month, Groupon completed a $950 million round of financing, a deal that valued the company at $4.75 billion, people familiar with the matter said. Groupon said it would use the funds to expand the business and buy back equity from existing shareholders.

Investors in the funding round included venture capital firms Andreessen Horowitz, Greylock Partners and Kleiner Perkins Caufield & Byers.

Growth Seen

The company, which is weighing the pros and cons of an IPO, will seek a bank with which it can have a long-term relationship, said Mason, who’s also the company’s founder, adding that “it’s less about where Groupon is this year than about where it will be ten years from now.”

Groupon sends daily deals to 50 million subscribers in 35 countries, up from 2 million subscribers in the U.S. a year ago. The company offers daily discounts of as much as 90 percent from businesses such as restaurants, nail salons and clothing stores. It then keeps a portion of the revenue.

“There are tons of local businesses all over the world that we hope to bring it to,” Mason said today. “We went from 3 million in 2009 to 50 million subscribers. We hope to grow at a similar pace in 2011.”

Mason said today that the bank chosen by the company could be useful later on for financing and “helping find the right kind of investors.”

While it leads the daily deal market, Groupon faces mounting competition from rivals such as LivingSocial. That company received $183 million in an investment round led by Amazon.com Inc. last month.

Google may also be considering a service similar to Groupon, called Offers, a challenge Mason shrugged off today.

“We don’t get too crazy about what other people are doing,” he said.

To contact the reporter on this story: Matthew Campbell in Munich through the Paris newsroom at mcampbell39@bloomberg.net

To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net

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