Coupons.com Inc., a 13-year-old company that’s benefiting from surging interest in online discount sites, attracted $200 million from institutional investors, helping it expand services and boost hiring.
Coupons.com, which didn’t name the investors, aims to boost its staff of 300 by 100, adding engineering, sales and marketing positions, the Mountain View, California-based company said today in a statement. The deal values the business at $1 billion and helps set the stage for a potential initial public offering in 2012, according to a person with knowledge of the investment.
Coupons.com, which promotes discounts for companies such as General Mills Inc. and L’Oreal SA, is benefitting from a shift of coupons to the Internet. The number of digital coupon offers in the U.S. rose 37 percent in 2010, while the overall coupon market rose 6.8 percent, according to Deerfield, Illinois-based NCH Marketing Services Inc., a coupon processor.
“We have increasing demand from manufactures and retailers and consumers,” said Steven Boal, chief executive officer of Coupons.com. “We’ve got significant client pressure to drive more and more of their promotions in digital, and out of the Sunday newspaper.”
The company expects to roughly double revenue to more than $100 million this year, according to the person, who asked to remain anonymous because the finances aren’t public. Denise Welch, a spokeswoman for Coupons.com, declined to comment.
The funding came from “tier-one mutual funds,” rather than venture capitalists, Boal said. As much as $100 million of the funding will go to employees and early investors. The money also will help the company roll out new services, expand internationally and make acquisitions. Allen & Co. acted as a financial adviser for the investment.
The company doesn’t see itself as a direct competitor to Groupon Inc. because Coupons.com focuses on supermarket fare and consumer products -- say, $1 off Kraft cheese slices. Groupon, which is planning its own IPO, pioneered the market of daily deals -- discounts that require buy-in from users. For instance, a customer will pay $10 for $20 worth of clothes at Old Navy.
Coupons.com is targeting new areas of growth, including mobile-phone coupons and social media. In 2009, it acquired Free State Labs LLC, the developer of Grocery iQ, a mobile application that lets users create and share shopping lists and get discounts.
Coupons.com makes money when a customer downloads a coupon for redemption. It offers discounts on its own website and also provides digital-coupon services for business clients, including helping companies manage discounts on Facebook Inc.’s site.