The story
Founded by Andrew Mason in 2008, in Chicago.1
The idea that would eventually become Groupon was born out of founder Andrew Mason's frustration trying to cancel a mobile phone contract in 2006. Mason thought that there must be some way to leverage the collective bargaining power of a large number of people. In 2007 Mason launched The Point, a web platform based on the "tipping point" principle that would use social media to get people together to accomplish a goal. The Point was intended to organize people around some sort of cause or goal. It gained only modest traction in Chicago until a group of users decided their cause would be saving money. They wanted to round up people to buy the same product in order to receive a group discount. Founder Eric Lefkofsky wanted the company to pivot in order to focus entirely on group buying. Born from The Point, Groupon was launched in November 2008.
The name for the e-commerce platform, Groupon is a portmanteau of "group" and "coupon". Groupon's first deal was a two-pizzas-for-the-price-of-one offer at Motel Bar, a restaurant on the first floor of its building in Chicago.
The decision to focus on group buying proved wise. In just a year and a half, Groupon grew from a staff of a few dozen to over 350. Revenue and bookings also grew swiftly, and the company was valued at over $1 billion after just 16 months in business, the fastest company ever to reach this milestone.
Initial public offering
On June 2, 2011, Groupon filed to go public under the ticker symbol GRPN. The company went public on November 4, 2011, with its shares listed on Nasdaq. It was the biggest IPO by an Internet company since Google in 2004. The IPO was handled by Morgan Stanley, Goldman Sachs Group and Credit Suisse Group.
On August 10, 2011, Groupon updated its IPO filing, after facing scrutiny from regulators and analysts over its use of a non-standard accounting metric called Adjusted Consolidated Segment Operating Income. Critics argued that ACSOI was used by Groupon to present a misleading metric of profitability. Groupon's original IPO filing with ACSOI accounting showed a positive operating income of $60.6 million for 2010; after replacing the ACSOI metric with standard accounting metrics, Groupon's IPO filing reported an operating loss of $420 million for 2010. Prior to the IPO, some analysts criticized Groupon's decision to pay out over $940 million of the $1.12 billion in venture capital Groupon had raised before the IPO – over 84% of its venture capital raised – as cash payouts to its 3 founders and early backers, rather than into the company. The large cash payout also made Groupon technically insolvent when it filed for its IPO.
In 2012, it was noted that Groupon had lost 80% of its value since its initial public offering the previous year. The stock had since rebounded and was trading around $8 in Q1 2015 before plunging as low as $2.15 in early 2016.
2011 onward
Prior to the company's fifth anniversary, the Groupon website was completely redesigned and new features were added in November 2013. According to the SVP of product management, the original website was "designed for a deal of the day and the new site is designed for a marketplace." Following the website relaunch, the company rewarded a random selection of one million customers on November 20, 2013, with up to US$5,000 worth of "Groupon bucks".
Groupon recorded record-breaking holiday weekend sales in North America during the full (Black Friday through Cyber Monday) weekend of 2014 (Nov 28 – Dec. 21), representing the most successful four days ever in the company's six-year history, with sales up more than 25% year over year. Black Friday and Cyber Monday were the two biggest days in Groupon's North American history.
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Following Amazon.com's December announcement on drone delivery, Groupon reacted with a plan for "Groupon catapults".
On December 29, 2014, Groupon's shares rose by 1.4% after it was reported that Goldman Sachs was "weighing an investment in one of the daily deal company’s units."
Groupon named a new Chief Operating Officer on June 2, 2015, Rich Williams and in November, Williams was named CEO.
On September 22, 2015, Groupon announced they would be eliminating approximately 1,100 positions, primarily in their sales and customer service operations. As part of this restructure, they would also be ceasing operations in international markets such as Morocco, Panama, Philippines, Puerto Rico, Taiwan, Thailand and Uruguay. Exiting those markets was part of a strategy to boost profits.
In January 2016, Groupon signed a lease in Seattle for 42,000 square feet of space in the 1201 3rd Avenue building in downtown. This creates room for 400 employees, up from 300 that Groupon currently employs in Washington.
In May 2016, Groupon sued IBM, claiming that IBM had infringed the patent of technology that allows solicitation of customers based on where the customers are located. Groupon filed the lawsuit shortly after IBM accused Groupon of infringement in a previous lawsuit. In October 2018 the separate lawsuit was settled, with Groupon paying IBM $57 million to cover the infringement and licensing of four patents.
In November 2016, Groupon began to reduce its area of coverage from 27 countries down to 15. It shut down operations in South Africa on November 4 of that year.
In March 2020, both Groupon's CEO Rich Williams and Chief Operating Officer Steve Krenzer stepped down from their roles. Despite that, both of them still remain employed by the company, "The terms of Mr. Williams’ and Mr. Krenzer's separations will be disclosed as available and required". Interim CEO Aaron Cooper was replaced by Kedar Deshpande. Dušan Šenkypl became the company's new CEO in March 2023.
In June 2022, Groupon settled a class action lawsuit with a group of investors for $13.5 million. The agreement resolved claims that Groupon has misled investors.
In December 2022, two beauty salons, Salon Phoenix Cosmetology in Hoboken, New Jersey and Salon Hairroin in Los Angeles, filed a class action lawsuit against Groupon, arguing that company listed them on their website without their permission, thus tarnishing their reputations and stealing organic search traffic from them. In November 2023, an Illinois federal judge approved a settlement (preliminarily approved in August 2023) between the two companies and Groupon. That settlement benefitted more than 2.5 million small businesses. All class members were also able to ask Groupon to remove or edit company profiles and expired deal pages.
Acquisitions and partnerships
Groupon owns numerous international operations, all of which were originally deal-of-the-day services similar to it, but most of which was subsequently re-branded under the Groupon name after the acquisition, including the European-based MyCityDeal (May 17, 2010), the South American ClanDescuento (June 22, 2010), the Japanese service Qpod.jp and Russian Darberry.ru (both acquired on August 17, 2010), and the Singaporean Beeconomic.com (November 30, 2010), which was founded by brothers Karl Chong and Christopher Chong.
Groupon bought the Indian deal-of-the-day website SoSasta.com in January 2011 and re-branded it as "Crazeal by Groupon Inc." The Groupon acquisitions of uBuyiBuy launched services under the Groupon name in Hong Kong. In addition, Groupon acquired GroupsMore.com to expand its business in Malaysia.
Prior to these acquisitions, Groupon had bought out the mobile technology company Mob.ly, while The Point, Inc., the predecessor to Groupon, bought the trademark
On August 4, 2011, the company acquired Obtiva, a large Chicago, Illinois-based Ruby on Rails and Agile Software Development consulting firm for an undisclosed amount, in order to boost its technology recruiting capabilities.
In January 2012, the company acquired Mertado, a social shopping service based on the Facebook platform. In May 2012, Groupon acquired Breadcrumb, a point of sale system and iPad app that targets local restaurants. Based on the May acquisition, Groupon launched Breadcrumb PRO and Breadcrumb POS, expanding its target beyond restaurants to include all types of local businesses.
On September 24, 2012, Groupon acquired restaurant reservation and discount site Savored for an undisclosed amount, providing Groupon with an inlet to higher-end restaurants. Groupon also announced that it would continue to operate Savored independently from the main Groupon website.
In December 2013, Groupon acquired Boomerang, a Lightbank-backed start-up that allows people to share gift cards and other deals from local merchants with their friends. Boomerang's two cofounders, Zachary Smith and Matthew Williams, along with eight employees went on to build a new digital-coupon offering, called Groupon Coupons.
On January 11, 2013, Groupon acquired real-time location sharing mobile app and small business service provider Glassman, which was founded and led by Geoffrey Woo, Jon Zhang and Jonathan Chang. On September 9, 2013, Groupon announced acquisition of European last-minute travel app Blink (founded by Rebeca Minguela), which provides same-day hotel reservations.
In January 2014, Groupon bought ideeli, a fashion company, for $43 million. On October 2, 2014, Groupon unveiled Snap, a new app specifically for giving customers cash back when they buy certain items at the grocery store. Snap asks shoppers to upload photos of their receipts after they have gone to the supermarket to buy groceries. Certain items are then eligible for discounts, which shoppers receive in the form of a cash-back deal. The new app comes from Groupon's previous acquisition of SnapSaves, a Canadian start-up that works much like Snap. In November 2014, Groupon acquired In-Store Analytics And Marketing Start-up, Swarm Mobile, a start-up that helps businesses connect with and track their customers while in stores.
On July 16, 2015, Groupon announced its acquisition of food-delivery service Order Up. Two weeks later, Groupon announced its own Food Delivery Business, Groupon To Go.
In February 2016, Chinese online retailer Alibaba Group Holding Ltd disclosed that it had acquired a 5.6% stake in Groupon Inc. In April 2016, Groupon Inc. announced it received a $250 million investment from a private investment firm, Atairos Management LP, which has ties to Comcast Corp. The firm was founded by former Comcast Chief Financial Officer Michael Angelakis, who launched the firm earlier that year with more than $4 billion in committed capital from Comcast.
In May 2018, Groupon acquired Bristol, UK-based Cloud Savings company for $65 million.
From Wikipedia’s article on Groupon, shared under CC BY-SA 4.0.7