Group-buying giant Groupon has been valued at $US25 billion and is considering an IPO within the next year, a new report has claimed, in yet another sign the tech industry is heating up amid a variety of listing rumours and multi-billion dollar valuations.
The news comes merely hours after a separate report claimed competitor LivingSocial is in discussions with investors to raise $US500 million in a new funding round that would value the company at $US2 billion.
The new Bloomberg report claims Groupon has held talks with banks about an IPO that would value the company at $US25 billion, with sources saying that a float is likely to occur by the end of 2011 with a minimum value of $US15 billion.
The proposed valuation highlights the shocking growth of this industry – Groupon is barely 18 months old. It already has 70 million users and has expanded into 500 different markets, including Australia under the StarDeals brand.
The company was already rumoured to be worth $US1.3 billion last April after a $US135 million investment round, but a reported offer from Google worth $US6 billion pushed it up even further.
At the time, reports suggested Groupon was speaking with Goldman Sachs and Morgan Stanley about an IPO, but the new report does not specify if those two banks are still involved in discussions.
But while Groupon is continuing its success, it faces a growing number of competitors – especially in Australia, where more than a dozen group buying sites are all fighting for their piece of the market.
One source within the group buying industry has said Groupon has found it more difficult to penetrate the Australian market than it first assumed.
Groupon faced some trouble in Australia recently when it was criticised by the head of rival group-buying site Cudo for using “bait and switch” tactics in order to add more subscribers to its user base.
However, although several companies have attempted to emulate Groupon’s success, so far none have been able to match the global scope of its business – it is continually expanding into new markets, including the Middle-East.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
