Lots of excitement today about Groupon’s intention to raise a new monster round of financing, with speculation that the valuation of the still-young startup reaching nearly $8 billion. That speculation is only partially right, says a source with knowledge of the financing.
The company is raising big money – around $950 million. And the valuation is an impressive $4.75 billion valuation. Just not quite as impressive as the earlier figure being thrown around. A separate source says Allen & Co. is advising Groupon on the deal.
The company, which just recently turned down an acquisition offer from Google, has raised $171 million to date, much of it taken off the table by founders and execs. Our expectation is that much of this new round of financing, if not all of it, will also be used to cash out existing investors.
The deal should be closed in a few weeks, says our source.
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...