gets first VC investment ever: $30M

Faith Merino · October 3, 2011 · Short URL:

Greylock becomes's first ever VC investor by buying shares off the secondary market

Fresh off its latest round of $200 million, announced Monday that it has secured a fresh new round of capital to the tune of $30 million from Greylock Partners.  Interestingly, the company disclosed that the investment was a secondary market transaction, which means Greylock didn’t actually buy shares directly from, but rather from an outside shareholder. 

CEO Steven Boal tells me that ultimately, didn’t need to raise the money since it just raised $200 million.  Rather, the transaction was used as a way to get Greylock involved in the company.

“This is actually the first time that we’ve had an investment or a shareholder that’s a VC,” Boal said in an interview with VatorNews.  “I got to know Reid over the years and have found his wisdom, experience, and rolodex to be really top, top tier, so I was really excited when they reached out to be a part of the company.”

The fact that this is the first VC investment that has received in its 13-year history is surprising, but not when you consider the era in which it got started. was launched in 1998—right on the cusp of the dot com bust.  At that time, Boal says the digital coupon industry was in its infancy and has taken a while to grow into its own.  But it may have declining newpaper sales to thank for that.

As print newspaper sales have withered away, so too have print coupons, which translates to an ever mounting rise in traffic to digital coupon sites like  In 2009, digital coupons accounted for 10% of all coupons distributed, compared to just 1.1% in 2006.  Meanwhile, paper coupons have declined to 50% of all coupons distributed in 2009 from 63% in 2006.

What do these numbers mean to  It all translates to money in the bank. distributed more than 332 billion coupons in 2010 and has become the 39th most trafficked website in the United States—up from 43rd back in June, when it raised its $200 million round.  Its network includes retailers that total 46,000 locations throughout the U.S.

The company is currently on track to make $100 million in revenue this year, which is up from $60 million last year and $40 million the year before that.  It’s also growing its headcount by 50% this year, expecting to reach 450 employees by the end of the year.  By comparison, in June, the company had 288 employees.  

" is almost single handedly transforming the multi-billion dollar coupon industry by ushering the newspaper-dominated business to digital,” said Greylock partner Reid Hoffman in a statement.  “The market opportunity the company faces is immense, and we look forward to contributing in any way to their continued success, particularly in the context of social and mobile solutions." has raised $285 million to date and plans to expand its mobile and social plans.  The company acquired Grocery iQ in 2009 and has been working on the platform to deliver apps for iOS and Android, as well as an upcoming BlackBerry app. 


Image source:

Support VatorNews by Donating

Read more from our "Trends and news" series

More episodes