Bloomberg reported Thursday that Groupon – a prominent provider of digital daily discounts – is actively speaking with bankers about a potential Initial Public Offering (IPO) that could be valued at $25 billion.
By comparison, Google was only valued at $23 billion in its IPO.
Companies like Groupon are “being valued as though they are going to be the next Google or EBay or Amazon,” Claire Enders, the founder of London media-consulting company Enders Analysis, tells Bloomberg. “But their business models may reach their limits a lot more quickly, or not work in as many markets.”
Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) have discussed handling an IPO for Groupon, a person familiar with the talks said in January. Those meetings focused on a $15 billion valuation for a future IPO, the person said.
To say Groupon is growing at a fast pace would be a dramatic understatement. In reality, Groupon has arrived in hundreds of new cities and even “doubled its subscriber base” just in the last 90 days. As you may recall it was just this past December when Groupon declined a $6 billion takeover bid from Google.
In hindsight, the decision to dodge Google was likely a sound one, as Groupon now boasts better than 70 million users and has two hundred more markets in its portfolio than it had just three months ago.
Although a done deal is far from being confirmed, many believe a Groupon IPO will, in fact, happen this year.