Thursday, June 2, 2011

Groupon says it looks to raise $750 million in an IPO; company lost $413 million last year

An SEC filing is not where you will find modesty: "I started The Point to empower the little guy and solve the world's unsolvable problems. A year later, I started Groupon to get Eric to stop bugging me to find a business model. Groupon, which started as a side project in November 2008, applied The Point's technology to group buying. By January 2009, its popularity soaring, we had fully shifted our attention to Groupon."
So reads the letter from Andrew D. Mason contained in the Form S-1 filed today with the SEC by Groupon, which now hopes to raise $750 million in an initial public offering (IPO). The filing also shows that the social buying service has seen its revenue explode from $94K its first year in 2008, to $30 million in 2009, to $713 million last year. It has already generated $644 million in revenue in the first three months of 2011.

But Groupon is still bleeding money, losing $413 million last year, and is on a similar pace in 2011.

Groupon, which said "no" to Google's $6 billion bid, will rely on Morgan Stanley, Credit Suisse and Goldman Sachs as lead underwriters for their IPO.

The time seems right for tech IPOs, if LinkedIn's IPO is any reflection of the market (LNKD is currently trading at around $80 a share today, lower than their first week performance, but still much higher than original expectations).

My bet is still that saying "no" to Google was foolish, but one can never discount that the feeding frenzy will continue to the advantage of Groupon.

Update: TechCrunch reminds us that Groupon isn't the only new media company looking to IPO. Music streaming service wants to raise a little over $140 million, pricing its shares at around $7 to $9 per.

Revenue at Pandora are not anywhere near Groupon levels, however, but then again they sell advertising around its content, whereas at Groupon it is the content.