Chicago based Groupon ("group coupon") is one of the great technology stories in recent memory. For those of you who still spend most of the time in the physical world, Groupon is a deal-of-the-day website localized to major markets that promotes itself with the now well-known tag line: 1 Ridiculously Huge Coupon A Day. It’s been described as the fastest-growing company in Web history.
Here’s how it works: your business gets exposure to Groupon’s gigantic user base and, in return, you give potential customers a juicy discount. Whenever Groupon collects money on behalf of merchants from selling coupons on its Web site, it keeps an average of 50%. The twist – the deal is on only “on” if a pre-determined number of people sign up for it (usually 10 or more). The platform is used daily by a multitude of businesses, ranging from small enterprises to large brands such as the Gap and the Toronto Raptors.
Here are some Groupon highlights:
Launched November 2008
Number of subscribers who receive emails with “Coupon of the Day” offers – 50 million
Revenue (2009 est.) – US $30 million Revenue (2010 est.) – US $760 million Revenue (2011 est.) – US $2 billion
Number of employees (2009 est.) – 120 in 30 cities Number of Employees (2011 est.) – 5,000 in 565 cities
Buyout offers – Google made an offer for $6 Billion (offer was turned down)
IPO – rumours of an IPO within the next 24 months at a valuation of $20-$25 billion
Now that we’ve established that all is well for Groupon, how is it working out for the merchants? Stay tuned for my next post.