Groupon Files to Raise $950 Million in Preferred Stock
Groupon Inc., the Chicago-based online-coupon site that spurned a $6 billion offer from Google Inc. this month, has filed to raise as much as $950 million from the sale of preferred shares.
The company amended its certificate of incorporation, allowing it to issue about 30.1 million shares of Series G preferred stock at a price of $31.59 a share, according to a Dec. 17 filing with the state of Delaware. The financing would value Groupon at as much as $7.8 billion, exceeding Google’s offer, according to VCExperts, a website that offers data and analysis for venture capitalists and private equity investors.
Groupon Chief Executive Officer Andrew Mason is raising money as he considers an initial public offering in the new year. Last week, Groupon hired Jason Child, Amazon.com Inc.’s former vice president of finance, to be its chief financial officer. The company, which offers deals in more than 300 cities, will have sales that top $500 million this year, people familiar with the matter said this month.
“They’ll move into more new markets, and that either means buying an existing company, which they’ve done in Europe, or establishing the infrastructure they need on the ground, which would mean hiring people,” said Greg Sterling, an analyst at Internet2Go, an advisory service that’s part of Opus Research in San Francisco.
Mason said in a Twitter message yesterday that Groupon was in the process of completing a new round of financing. Julie Mossler, a spokeswoman for the company, declined to comment when reached by telephone today.
The last time that Groupon amended its certificate was on April 16, when the company gave itself the right to issue $135 million in Series F preferred stock. Three days later, Groupon announced that it raised the same amount from an investment group led by Digital Sky Technologies.
Sterling, who said last week he expected the company to file for an IPO next year, now says the funds raised could push that back until 2012.
“Ultimately, they need to go public unless somebody’s going to come forward with a super massive offer,” he said.
Founded in 2008, Groupon offers daily group discounts on restaurants, theme parks, clothes, manicures and other consumer items. The company has amassed more than 35 million registered users and a staff of 3,000 people, most of them in sales.
Mason turned down the sale to Google because he was concerned it would sap employee morale and alienate business clients, said the people with knowledge of the matter. They asked not to be identified because the talks, which involved Google CEO Eric Schmidt, were private.
Groupon will make a decision next year on whether and how soon to proceed with an IPO, a person familiar with the company said earlier this month. Groupon is trying to get a bigger piece of the U.S. local-advertising market, which may reach $133 billion this year, according to consulting firm BIA/Kelsey in Chantilly, Virginia.
The Digital Sky investment in April gave Groupon a valuation of about $1.3 billion. LivingSocial, Groupon’s biggest rival, announced a $175 million investment from Seattle-based Amazon this month.
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