Following a week of rumors, social buying startup Groupon has secured $135 million from Digital Sky Technologies, along with Battery Ventures. The startup, which closed its Accel-led second round of
funding late last year to the tune of $30 million, is now profitable and has 270 employees -- the majority of whom are sales associates responsible for reaching deals with local service providers from
yoga studios to sushi restaurants. According to
Boom
Town, the funding will be used “to speed far ahead of numerous rivals,� although it will also likely inspire more entrepreneurs to join the social buying
marketplace. Groupon 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.
