NEW YORK (AP) - Groupon Inc., the fast-growing Internet startup that offers local deals and discounts to members, has raised $500 million of the $950 million it is planning to collect in its latest financing round.
The Chicago company said in a regulatory filing Thursday it plans to use up to $344.5 million of the proceeds to buy back shares from existing shareholders, including founder and CEO Andrew Mason.
Groupon raised the money just a few weeks after Google Inc.’s attempt to buy the 2-year-old company for a reported $5 billion to $6 billion fell through. If it hadn’t, it would have been Google’s largest acquisition.
Previous funding _ $135 million _ came from Mail.ru Group, also known as Digital Sky Technologies, a Russian Internet investment firm that also holds a stake in Facebook.
Groupon employs about 3,000 people, about 1,000 more than the much-larger Facebook. Most of these people work in sales, dealing with local and national merchants who set up discount deals. This has some analysts questioning how easily Groupon can grow its business, since it needs to hire a lot of salespeople to set up deals.
Groupon’s more than 35 million subscribers receive e-mails or posts on their Twitter or Facebook pages about daily bargains in their region, such as $40 worth of food at a restaurant for $20 in San Francisco, or $49 for $130 worth of yoga classes in Anchorage, Alaska. The deals only become active if enough people sign up for them, to make it worthwhile for the businesses.
Groupon did not say who the investors were that took part in its offering, only that there were 33 of them. Venture capital data provider VC Experts estimates that if Groupon raises the full $950 million, it will be worth about $6.4 billion total.