Daily deals site Groupon Inc. has turned down an acquisition offer from Google Inc., as first reported by Chicago Breaking Business, which cited “two sources with direct knowledge of the situation.”Chicago-based Groupon ultimately decided to remain independent and may pursue an IPO, although it “will not make a decision about going public until 2011,” according to a source who spoke with Chicago Breaking Business.
Groupon apparently believes it has lots of room to grow. AllThingsD reported that the company’s annual revenue is running at about $2 billion. (Every dollar of Groupon revenue is split 50/50 between Groupon and each of the vendors that offer deals on its website.)
The rejection of Google’s offer doesn’t come without risk for Groupon’s venture backers. Accel Partners, Battery Ventures, Digital Sky Technologies and New Enterprise Associates (NEA) have invested a combined $169.8 million in the company since 2008, according to Thomson Reuters (publisher of this blog).
NEA led a $4.8 million Series A in the company in the company in January 2008, with NEA putting up $4.79 million from its 12th fund and Green Media LLC and Rugger Ventures LLC providing the remaining $100,000, according to Thomson Reuters.
In December 2009, Accel Partners led a $30 million Series B round and was joined by NEA. How much each firm invested was not disclosed. NEA reported that it funded the round from its 12th fund, but Accel did not disclose the name of the fund or funds it tapped for the capital.
In June of this year, Groupon raised $135 million from Accel, Battery Ventures, Bristol Ventures LLC , Digital Sky Technologies and NEA, according to Thomson Reuters. Thomson Reuters did not specify the details of the round, such as the amount provided by each investor, whether it was a Series C round or which firm led the deal. AllThingsD reported two months earlier that Digital Sky led the round and that the deal valued Groupon at more than $1 billion.
Thanks to the success of Groupon, the number of daily deal websites has exploded to more than 100 and venture capitalists continue to bet on new players, according to a report by peHUB on Wednesday. The following day, Groupon competitor LivingSocial announced that it had raised $175 million from Amazon plus another $8 million from Lightspeed Venture Partners. The Washington, D.C.-based company had previously raised $49 million over four rounds from Lightspeed, Grotech Ventures, U.S. Venture Partners and Steve Case’s Revolution fund.
