Multiple sources tell us that Groupon, the surging Chicago-based startup, was valued at $250 million when they closed their recent $30 million venture round with Accel Partners and previous investors. In that post we wrote that “the company is going gangbusters,” but apparently that’s a bit of an understatement. Post round, the value of the company is at least $280 million.
Groupon offers users deep discounts on products and services from local businesses. A minimum number of users must sign up for a deal before it activates, giving users an incentive to spread links to friends on Facebook, Twitter and via email. The company says they are on track to generate $100 million in gross merchandise sales in 2010. They take a big cut of that for themselves, generally 30% – 50%. A number of my friends tell me they’re addicted to Groupon’s deals (all of them are women who love to shop).
The round was very competitive, which explains the high valuation. Groupon appears to have created a compelling local advertising platform that generates a ton of cash.
Disclosure – one of our writers, Leena Rao, is married to a new Groupon employee. Despite my bullying, Leena refused to give up any information on the company.