Key Takeaways

• Groupon generated a revenue of US$967.11 million in 2021 as compared to US$1,416.87 million in 2020. The company witnessed a revenue drop of about 32% in 2021 as compared to 2020 due to reduced demand for its goods category on the website.
• Groupon raised total funding of US$1.4 billion through eight funding roundings between 2007 to 2019. In January 2011, the company raised US$950 million through a Series D funding round and at a pre-money company valuation of US$3.8 billion. The ten investors of this round include TCV, Silver Lake, Morgan Stanley Venture Partners, Maverick Ventures, Kleiner Perkins, Greylock Partners, Fidelity, DST Global, Battery Ventures, and Andreessen Horowitz.
• In 2019, Groupon announced that it acquired "Presence AI, an AI-powered text and voice communications tool that enables and facilitates messaging between customers and merchants." This strategic acquisition was made to help Groupon enhance the booking experience for its customers using the booking technology of Presence AI. The motive behind this acquisition was to improve the communication infrastructure, including its text- and chat-based interface, for Groupon's customers and clients using artificial intelligence technology.

Introduction

Groupon Company Analysis

I — Company Overview

1. About & History

• Groupon is an e-commerce marketplace that offers discounts, deals, and coupons for various local goods and services as well as travel experiences. The company was incorporated in 2008 and was co-founded by "Andrew Mason, Eric Lefkofsky, and Brad Keywell". Groupon is currently headquartered in Chicago, Illinois, United States.
• Andrew Mason helped in launching "a tipping-point-based collective action website" in 2007 with an aim to bring people together to achieve a goal. In the next year, i.e., in 2008, Groupon was established as a platform to help promote local businesses by providing limited-time deals from those businesses to the consumers. In 2009, the company was able to reach 28 cities in the United States and was able to expand to the global markets in the following year, including countries such as the United Kingdom, Germany, and France among others.
• In 2011, Groupon became popular in press and media channels such as the Ellen Degeneres and The New York Times. By 2012, the company launched various app updates and changes to improve the online experience for the consumers after realizing the fact that about one-third of all the company's transactions in North America were completed using mobile devices. Currently, Groupon serves businesses and consumers across the globe.

2. Products & Services

• Groupon offers coupons, cashback, and limited-time deals to consumers for various product categories such as health & beauty, home equipment and accessories, clothing, automotive, home improvement, baby & kids products, electronics, grocery & household, jewelry & watches, personalized Items, pet supplies, and sports & outdoors.
• The company also provides deals to consumers for service categories such as hotels & travel experiences, air trips, beach experiences, family fun trips, ticketing for events, sightseeing & tours, nightlife, dining, and sports & outdoor activities.

3. Revenue & Financial Statistics

• Groupon generated a revenue of US$967.11 million in 2021 as compared to US$1,416.87 million in 2020. The company witnessed a revenue drop of about 32% in 2021 as compared to 2020 due to reduced demand for its goods category on the website.
• The company's revenue in the first quarter of 2022 was US$153 million.

4. Funding & Investments

• Groupon raised total funding of US$1.4 billion through eight funding roundings between 2007 to 2019. In January 2007, the company raised US$1 million through a seed funding round with two investors, namely, Eric Lefkofsky and Bradley Keywell. The company raised US$4.8 million through a Series A funding round in January 2008. The two investors who funded this round were New Enterprise Associates and Clear Ventures.
• In December 2009, the company raised some additional funds of about US$30 million through a Series B funding round. Accel was the lead investor of this round along with two other investors — SV Angel and New Enterprise Associates.
• Groupon received another funding of US$135 million in April 2010 through a Series C funding round. The pre-money valuation of the company was US$1.2 billion for this funding round. The five investors who funded this round were DST Global (lead investor), New Enterprise Associates, HV Capital, Battery Ventures, and Accel.
• In January 2011, the company raised US$950 million through a Series D funding round and at a pre-money company valuation of US$3.8 billion. The ten investors of this round include TCV, Silver Lake, Morgan Stanley Venture Partners, Maverick Ventures, Kleiner Perkins, Greylock Partners, Fidelity, DST Global, Battery Ventures, and Andreessen Horowitz.
• The company raised additional funding of US$16.2 million through an unknown venture round in February 2011. Ted Leonsis, Techstars New York City Accelerator, New Enterprise Associates, Maveron, and Kite Ventures were the five investors of this round.
• In November 2011, the company raised US$700 million through an initial public offering (IPO) at a valuation of US$12.7 billion.
• Groupon received an investment of US$250 million through a post-IPO equity funding round in April 2016. Atairos was the lead investor in this round.

• In December 2019, the company received another investment from MIG Capital in a post-IPO equity funding round. The investment amount was unknown.
• Groupon has made investments in eight companies, of which, it is a lead investor in three companies, namely, SumUp, ClubLocal, and Jump On It.
• The information, from where the funding and investment details are sourced, may have limited view credits for non-users (i.e., public visitors). Thus, as an alternate option, we have also provided screenshots of various sections from where the information was sourced in this Google Doc.

II — Corporate Values & Mission

• Groupon's mission statement is as follows: "To be the destination for experiences -- where customers discover fun things to do and local businesses thrive."
• The company's five core values revolve around: (i) respect, integrity, and inclusion, (ii) community, (iii) ownership and performance, (iv) inspiration, and (v) customers.

III — Strategic Initiatives: Past and Announced

• In 2019, Groupon announced that it acquired "Presence AI, an AI-powered text and voice communications tool that enables and facilitates messaging between customers and merchants." This strategic acquisition was made to help Groupon enhance the booking experience for its customers using the booking technology of Presence AI. The motive behind this acquisition was to improve the communication infrastructure, including its text- and chat-based interface, for Groupon's customers and clients using artificial intelligence technology.
• In 2021, Groupon announced a partnership with Square to help local businesses create marketing campaigns on Groupon's platform with ease. Willem Ave, the general manager of Square Appointments, stated, "By partnering with Groupon, Square is providing sellers with access to the tools they need to promote their businesses, attract new customers, and increase sales. Square’s Booking API enables businesses to unlock a new, integrated channel to drive round-the-clock bookings, while also offering enhanced customer experience to buyers who can now seamlessly purchase and book appointments all from one place."
• Groupon announced a partnership with Google Pay to provide its customers with access to various "deals on Google Pay beginning in 2022." The Google Pay users will be able to connect with more local merchants through this partnership with Groupon and will get access to 1000+ deals on the app. Aaron Cooper, the former chief executive officer of Groupon, stated, "This new partnership with Google Pay will greatly expand our ability to help merchants reach new customers and make it easier for more consumers to tap into the thousands of experiences available in the Groupon marketplace."

IV — Digital Strategy Quotes From Senior Employees

• In June 2022, Sachin Devand, the chief technology officer (CTO) of Groupon stated, "We have amazing talent within our Product and Engineering organization, and I believe that we can do a better job leveraging our significant tech assets to create value for all of our stakeholders. Currently, our platform is too big and too complex, and this is prohibiting us from moving as quickly as I think we can to launch new products and features. So, I’ve empowered the entire tech organization to challenge our long-held thought process of creating a new service for every nuance and fundamentally rethink how we structure our platform––only building and supporting what’s mission-critical to driving Groupon’s business forward."
• In 2020, Gabrielle Stafford, the vice president of global marketing at Groupon, stated, "We use a combination of in-house and external third-party marketing technology, which facilitates consistent language implementation across our channels. But there are times, like at the start of COVID-19, when you need to pivot quickly. This is when technology and automation have to be taken out of the equation a little bit and a more hybrid approach is required – involving more manual intervention."

V — Key Highlights of the Company's Digital Strategy

• According to the company's annual report, the company is focused on lowering its digital marketplace friction "by making it easier for its customers to find, buy, and redeem a Groupon." To make this possible, Groupon is planning and introducing "new initiatives that they believe will improve engagement, conversion and customer purchase frequency over time. For merchants, they are continuing to focus on being a better partner by offering self-service options, advertising products, and booking capabilities."
• The company's recent strategic focus is to modernize its online marketplace to enhance the experience for its customers and clients. Thus, as a part of this ongoing digital strategy, the company recently launched a new user experience (UX) to provide new offerings, improve the booking experience, and drive repeat purchases.
• Groupon also partners with and acquires various tech platforms and solutions companies to expand its digital presence through artificial intelligence, automation, and other tech solutions.
•  Since 75% of Groupon's transactions across the world are made using mobile devices, the company's long-term strategic focus is on mobile-related technologies. The company aims to make its mobile app compatible with "a range of mobile technologies, systems, networks, and standards".

VI — Existing Marketing Tech Stack

• Groupon uses marketing analytics tools such as "Amazon Advertising Sizmek Ad Suite, Bizo Insights, BloomReach, Blue Triangle Tech, Channel Intelligence TrueTag, ChannelAdvisor, Chartbeat, ClickFunnels, Datalogix, Dotomi, DoubleClick Floodlight, Efficient Frontier, Eloqua, Everest Technologies, Fastly, Freshmarketer, Hotjar, IgnitionOne, KISSmetrics, Kenshoo, Kochava, LinkedIn Insights, LiveRamp, Marketo, MediaMath, Mercent, Mixpanel, Moat, Netmining, Offerpop, Omniture, Optimizely, OwnerIQ, PayPal Marketing Solutions, Salesforce, and TikTok Conversion Tracking Pixel" among many others.
• The company uses some of Facebook's tools such as Facebook Conversion Tracking, Facebook Domain Insights, Facebook Pixel, Facebook Signal, and Facebook Tag API.
• Groupon also uses marketing tools from Google such as Google AdWords Conversion, Google Analytics, Google Analytics Enhanced Ecommerce, Google Analytics Enhanced Link Attribution, Google Analytics Event Tracking, Google Analytics IP Anonymization, Google Conversion Linker, and Google Conversion Tracking.
• The full list of tools that were publicly disclosed on third-party websites can be accessed in the spreadsheet here.

VII — Challenges Faced by the Company

• COVID-19 pandemic: In its annual report, the company highlights how the COVID-19 pandemic "is expected to continue to, materially affect its business, financial condition and results of operations, and any future outbreaks of new COVID-19 variants, other contagious diseases, and other adverse public health developments could materially affect its business."
• Technology breaches and cybersecurity: Groupon's business heavily relies on internet-based activities, technologies, and solutions. In its annual report, the company states, "We may be subject to breaches of our information technology systems, which could harm our relationships with our customers, merchants, employees, and third-party business partners, subject us to negative publicity and litigation, and cause substantial harm to our business or brand." Thus, Groupon focuses on continuously building technology infrastructure that could help them protect their business, consumers, and clients during challenges like these.
• Lack of long-term agreements with merchants: Groupon's annual report states that currently, "in most instances, the company does not have long-term arrangements to guarantee the availability of deals that offer attractive quality, value, and variety to customers or favorable payment terms to Groupon. If merchants or third-party partners decide that utilizing Groupon's services no longer provides an effective means of attracting new customers or selling their offerings, they may stop working with Groupon or negotiate to pay the company lower margins or fees."

VIII — Competitors of the Company

1. Amazon.com

• Amazon is a multinational e-commerce platform that offers almost all types of products by connecting consumers and sellers. The company's website can be accessed here.

2. Walmart

• Walmart, based in the United States, is a multinational retail corporation that operates an offline chain of hypermarkets and grocery stores as well as an online marketplace to serve its consumers digitally. The company's website can be accessed here.

3. RetailMeNot

• RetailMeNot, based in Austin, Texas, United States, is a "digital coupon marketplace" that aims to offer coupons and saving deals for products and services of "retailers, restaurants, and brands" to the consumers. The company's offerings are available both online and in-store. The company's website can be accessed here.

4. Tanga

• Tanga, founded in 2006, provides best-saving deals on products from various brands and retailers. The company is headquartered in Arizona, United States. Tanga's website can be accessed here.

IX — Additional Facts

• As of Q1 2022, Groupon has around 22 million active customers across the globe.
• The company's latest statistics state that its platform gets around 100 million visitors sessions per month.
• To date, the company has sold more than 1.5 billion Groupons and about US$35 billion amount has been saved by customers in North America so far.

 

Source

 

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