• Tech Crunch, Thursday, April 15, 2010 2:30 PM

Rumor has it that Chicago-based Groupon, which offers local deals online, is raising another round of capital with a new valuation of $1.35 billion. Last December, when the start-up closed a Series B round worth $30 million, it was valued at just $250 million. It's no wonder that the company -- backed by Accel Partners and New Enterprise Associates -- has inspired countless imitators.
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The company offers deep discounts on local deals on everything from spas and sky diving lessons to hotels and restaurants. Discounts range from 40% to 90% of the normal price. If enough people buy into the offer, everyone gets the deal. If there aren't enough people, no one gets the deal.

Groupon collects payment and passes it on, minus their fee, to the business. What makes the service so compelling is that people have an incentive to get their friends involved to make sure the minimum is hit. To date, the site has accumulated 3 million subscribers and currently manages roughly 40 markets Russian Internet holding company Digital Sky Technologies is eying a stake in the startup.

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