Groupon Gets Almost A Billion Dollars In Financing, But Is It Worth It?

grouponlogoAnd you thought all that money that Facebook raised was too much. Groupon announced today that it has secured a mind boggling $950 million in investment financing. The company said it plans to use the money to further its global expansion, expand its investment in technology and create some liquidity for its employees and early investors. This is all admirable, but I just don’t know that Groupon is the kind of company that warrants this kind of heavy investment. I will concede that they brought the idea of group buying and the power that it represents to the masses, but they aren’t immune to competition. The problem for them is that there is no differentiating factor for Groupon at this point versus their competitors, right now they have the best deals but that may not always be the case.

I still think that Groupon was absolutely crazy for not taking Google’s acquisition offer that was rumored to be in the $5 to $6 billion range last month. I think that they will never be hotter than they are right now and they will never be able to get that kind of value again.

All that aside though, the company is growing quickly expanding into 35 countries and over 500 new markets last year alone. They also grew their subscriber base from 2 million users to a whooping 50+ million. Personally, I’m still not sold on Groupon and while I have the app on my phone I have yet to actually buy one of the deals. What about you all, are there any of you out there that absolutely can’t live without it? What makes it better than say Woot?

1 Comment

  1. Notdownwiththegroup says:

    I agree with the author here, Groupon doesn’t warrant this kind of investment. They are too susceptible to price pressure from other competitors, its not a unique thing. They should have took Google’s money and ran.

Leave a Comment