On Tuesday we reported on a massive new financing round for Groupon. We’ve been gathering more details on the yet-to-be-announced round and other financial details about the company, and the picture is now nearly complete.
Groupon raised (or is raising) around $130 million, says a new source, and the valuation is $1.35 billion. Russian holding company and investment firm Digital Sky Technologies is leading the round, and there’s participation from Battery Ventures as well. All or nearly all of the round is being used to purchase stock from insiders to give them an early cash out in advance of an IPO.
We’ve also heard that the Accel round last December, $30 million, was also used to cash out insiders. Meaning the founders, employees and other insiders will be taking a whopping $160 million in secondary stock sales.
Why isn’t Groupon raising the money for operations? Because it’s making money hand over fist, say our sources. The company is generating $1 million or more per week in pure profit from the resale of steeply discounted local business products and services. Estimated 2010 revenue is $350 million.
Groupon features a daily deal on the best stuff to do, see, eat, and buy in more than 565 cities around the world. By promising businesses a minimum number of customers, Groupon can offer deals that aren’t available elsewhere. Groupon brings buyers and sellers together in a fun and collaborative way that offers the consumer an unbeatable deal, and businesses a large number of new customers. To date, it has saved consumers more than $300 million and claims it...