Funding will be used to improve the technology behind the product and hire additional employeesRead more...
The company announces that it has raised, like, a billion dollars
Groupon has officially closed a massive $950 million round of funding, giving it a reported valuation of $4.75 billion. The company made the announcement Monday with a press released titled “Groupon raises, like, a billion dollars.” The round features investors aplenty, including Andreessen Horowitz, Battery Ventures, Greylock Partners, Kleiner Perkins Caufield & Byers, Mail.ru Group (formerly Digital Sky Technologies), Maverick Capital, Silver Lake, and Technology Crossover Ventures, with Allen & Company LLC acting as financial advisor. The deal represents the largest round of VC funding for a startup in history.
The company said in its statement that it intends to use the funds to fuel global expansion, invest in technology, and provide liquidity for employees and early investors.
Founded in 2008, Groupon has experienced an astounding growth rate—skyrocketing to more than 50 million subscribers worldwide today, with more than half of those subscribers being outside of the U.S, compared to just 3,000 subscribers in 2008. To date, Groupon operates in more than 500 markets (up from 30 in 2009) in 35 countries in North America, Latin America, Europe, and Asia, with even more reportedly cropping up in China, India, and Australia. The company employs over 3,300 employees today, compared to seven in 2008.
“They’ve cracked the code on a formula for how to basically give access on the Internet as a marketing channel for offline merchants,” said Marc Andreessen, co-founder of Andreessen Horowitz, to the New York Times. “It’s a very, very big deal because there are a lot of offline merchants that have not been able to use the Internet as a marketing vehicle.”
Dreamworks has held the record for the largest round of fundraising for the last 15 years, with $500 million raised when it, too, was just a nascent startup in 1995.
In more recent fundraising drama, Facebook just raised a startling $500 million in a round led by Goldman Sachs with help from Mail.ru (DST), to bring its valuation to $50 billion. In 2010, the largest rounds of VC funding for private companies went to electric vehicle infrastructure company Better Place with $350 million raised, and Twitter, with $200 million raised.
In April 2010, Groupon raised a $135 million round from Battery Ventures and DST. By comparison, Groupon’s largest competitor, LivingSocial, raised $183 million in December 2010 in a round led by Amazon, with help from Lightspeed Venture Partners.
“We’re thrilled that Groupon has earned the confidence of some of the world’s most respected investment firms,” said Andrew Mason, founder and CEO of Groupon, in the company’s announcement. “With their support, we will continue on our mission to change the way people shop locally and serve the world’s local businesses.”
Image source: inspirationcostumehire.com.au
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