Nov. 9 (Bloomberg) -- Yelp Inc., the review website, chose Goldman Sachs Group Inc. and Citigroup Inc. to lead its initial public offering next year, said two people with knowledge of the situation.
The San Francisco-based company hasn’t decided how many shares to offer, said the people, who declined to be identified because the plans haven’t been formalized. The Wall Street Journal reported Yelp’s IPO plans earlier and said the offering may value the company at as much as $2 billion.
Yelp is scaling back a foray into the daily-deal business, differentiating itself from top website Groupon Inc. as the market becomes inundated. Yelp planned to cut its sales staff dedicated to Yelp Deals by half, moving about 15 salespeople to other areas of the business, Vince Sollitto, vice president of corporate communications, said in an August interview. The number of deals e-mailed to users is unlikely to grow, he said.
Groupon raised $700 million last week in an initial public offering, becoming the biggest IPO by a U.S. Internet company since Google Inc.’s offering in 2004.
Stephanie Ichinose, a spokeswoman for Yelp, declined to comment on the company’s IPO plans. Andrea Rachman, a spokeswoman for Goldman Sachs, and Mark Costiglio, a spokesman for Citigroup, also declined to comment.
Yelp’s IPO would help lift returns at Elevation Partners, the private-equity firm whose investment team includes Roger McNamee and U2 singer Bono. The Menlo Park, California-based firm bought a 20 percent stake in Yelp last year for $100 million. A $2 billion valuation for the company would make Elevation’s stake worth $400 million.
Elevation is also an investor in Facebook Inc. The $270 million the firm has invested in the social-networking company is now worth about $1.2 billion. It is also an investor in online real estate company Move Inc. and was an investor in Palm Inc., before the handset maker was bought last year by Hewlett-Packard Co. In July, Yelp hired Rob Krolik from Move as chief financial officer.