Groupon Raises a Whopping $30M

Local deals and coupon (er, “social commerce”) purveyor Groupon announced that it had raised $30 million:

Groupon, the social commerce service that has saved consumers in cities across America more than $36 million since its launch 12 months ago, has raised a $30 million round of capital led by Accel Partners with participation from Groupon’s initial investor, New Enterprise Associates. The financing will be used to accelerate Groupon’s customer acquisition, expand into new geographies and further develop its technology.

Groupon leverages group buying and social media to provide its millions of customers big discounts on the best local businesses in major cities such as Chicago, Boston, New York City, San Francisco, Atlanta and Washington, D.C. To date, customers have purchased over 800,000 Groupons on deals ranging from spa treatments and golf outings to fine dining and skydiving.

Daily deals are delivered via email. I get them and mostly just delete because of lack of relevance (to my interests and lifestyle). Obviously, however, people love deals and email marketing remains quite effective. Daily Candy, a similar city-specific daily email newsletter, was sold last year for $125 million to Comcast.

Separately Coupons.com reported — it offers mostly grocery coupons with some fast food — the top coupon categories of 2009:

2009 Top Coupon Categories

  1. Ready-to-Eat Cereal
  2. Yogurt
  3. Sweet Snacks
  4. Refrigerated Dough
  5. Salty Snacks
  6. QSR/Casual Dining
  7. Nutritional Snacks
  8. Entertainment
  9. Condiments
  10. Pizza

My favorite categories on this list: Refrigerated Dough and Salty Snacks.

5 Responses to “Groupon Raises a Whopping $30M”

  1. Grouponing: Daily Deals Heat Up « Screenwerk Says:

    […] Previously email newsletter Daily Candy was sold to Comcast for $125 million. Groupon is already valued at $250 million. […]

  2. Leopold Bloom Says:

    I’ve been getting daily Groupons for six months. Maybe it’s my location, but I don’t see any repeat business, i.e. no companies doing a second Groupon. Deals are always popular with consumers, but not so much with the SMB, once he or she figures out what profit was left, if any, after giving stuff away at cost, then splitting the (greatly reduced) gross with Groupon.

    Groupon’s angle is a good one. However, it still doesn’t address the fundamental problem with coupons and SMB’s. At first, the SMB likes that their phone rings and that people want to patronize their business. But once the excitement wears off, and someone does some accounting, they often find they lost money on the promotion. Then they realize that not one of the cheap SOBS who redeeemed the coupon has ever come back–so they didn’t gain any new customers. Worse still, now that they have broadcast their willingness to lower their price by 50%, everybody wants a discount, or is going to wait until a discount is offered. They have just devalued their business, and they swear they will never to do a coupon again…

    If coupons were really such a big deal at a local level, your Advo/ValPak/Money Mailer would be stuffed with many more ads from local SMBS. They’re not–why? Because the vast majority of local SMBs don’t want to offer coupons in any way, shape or form! There’s a HUGE difference between a coupon for 10 cents off “Salty Snacks” at the supermarket, and “10% off Plumbing Repair” from a plumber.

  3. Greg Sterling Says:

    Agree that there’s ambivalence to reluctance among SMBs to offer coupons.

  4. Dejan Strbac Says:

    @Greg You are right, however if they avoid Groupon and other intermediaries, they might actually stick to it. Check out http://www.SyncFu.com that allows SMB to do volume sales without intermediaries.

  5. Groupon Pours More Gas on the Fire « Screenwerk Says:

    […] Greg Sterling Group buying just got hotter. The whole segment went on everyone’s radar when Groupon announced in December that it had raised $30 million on top of a previous $36 million. That round reportedly valued the […]

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