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Groupon Valuation Valuations

Now that Google has passed on Groupon and the group-buying platform is worth like a bajillion dollars (give or take $5 to 10$ billion), let the postmortems begin. Groupon's latest round of equity financing, in which it is seeking to raise $950 million, would be the biggest since Pixar's in 1995, reports Reuters.

Groupon say analysts, needs the money to grow. And it will get it they tell Reuters: "Michael Wolf, director of management consulting firm Activate, said that there may be high demand for the offering because Groupon is seen as a hyper-growth company whose best days are ahead of it. 'People look at it as a business that will be worth considerably more in the future,' he said."

The company will need the cash to hire "a massive local-sales army" writes The Atlantic, which notes that P. Morgan Brown pointed out, "Not even Google has attempted to build that kind of fighting force."

"Groupon CEO Andrew Mason has tamped down speculation over IPO plans, emphasizing overseas expansion instead," writes VC Experts, which broke the story. "And now we know how they plan to finance that expansion."

"This round is different than the last big one Groupon did with Russian holding company Digital Sky Technologies in that Groupon's new investor will get voting shares this time around," reports Silicon Alley Insider, which also notes that Groupon will need the capital to hire up for expansion.

Doing the math Dealbook writes, "While the valuation implied by the financing may be below $6 billion, reported to be Google's offer price, a controlling stake often requires a premium over the price one would pay for a minority stake."

The only question remains if shares can be had for a group discount.

Read the whole story at VC Experts et al »

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