Groupon float to make three billionaires
GROUPON’S three founders are set to become dollar billionaires when the online coupon phenomenon lists on the New York Stock Exchange.
In the latest blockbuster dotcom listing, Groupon’s planned sale of $750m (£459m) to $1bn of its stock assumes an overall company value of about $20bn – only slightly smaller than Google when it listed in 2004, raising $1.67bn.
A successful IPO would leave the founders – chief executive Andrew Mason and serial entrepreneurs Eric Lefkofsky and Brad Keywell – holding a total of $7bn in stock between them.
Mason, who owns about 7.7 per cent of its Class A stock will see his stake valued at about $1.5bn.
Lefkofsky, Groupon’s biggest shareholder with 21.6 per cent, would see his stake valued at $4.3bn while Keywell’s 6.9 per cent stake would be worth about $1.4bn.
The three founded Groupon in 2008 when Lefkofsky, then Mason’s employer at his Chicago printing business InnerWorkings, persuaded him to leave his graduate school place and start a business.
The prospectus also revealed more about Groupon’s finances. Revenue is generated by offering customers a daily money-off deal coupon and keeping half the coupon’s face value in each sale.
Described as one of the fastest-growing companies in history, the prospectus showed its revenue in 2010 was $713.4m – a 2241 per cent increase on its $30.47m revenue in 2009.
However, it has not yet turned a profit and made a $389.6m loss in 2010. While revenue in the first quarter of 2011 was $644.7m, it posted a net $146.5m loss in the period.
Mason said Groupon was spending the money on its future growth.
“We spend a lot of money acquiring new subscribers because we can measure the return and believe in the long-term value of the marketplace we’re creating,” he said in the filing.
“In the past, we’ve made investments in growth that turned a healthy forecasted quarterly profit into a sizable loss.
“When we see opportunities to invest in long-term growth, expect that we will pursue them regardless of certain short-term consequences.”