* Groupon has authorized equity round
* VC Experts see valuation as high as $7.8 billion
* Comes after reports of talks to sell to Google
(Adds possible valuation; comments from banker, analyst)
By Jim Finkle
BOSTON, Dec 28 Groupon Inc, the fast-growing
online coupon seller, has been authorized to raise up to $950
million in what would be the biggest round of equity financing
by any company since Pixar in 1995.
The company said in filing with the state of Delaware that
it intended to sell shares at $31.59 each.
That price would value Groupon at between $6.4 billion and
$7.8 billion, depending on the number of shares issued,
according to VC Experts, a research firm that specializes in
providing data on private companies.
Groupon, with annual revenue said to range from $500
million to $2 billion, sends members daily e-mails with steeply
discounted deals from local merchants. The deals are activated
when a certain number of people agree to make a purchase.
Officials with Groupon, which serves U.S. and Canadian
markets from New York to Sacramento, could not be reached for
Groupon said in the filing that the shares shall
automatically be converted into common stock if the company
The document, an amended and restated certificate of
incorporation, was filed Dec. 17.
Described by some as the fastest-growing Internet start-up
in history, Groupon's backers include Digital Sky Technologies,
which also is an investor in Facebook.
The move for new funding comes a month after reports that
Groupon was in talks to sell itself to Google Inc (GOOG.O) for
up to $6 billion. Google's shares fell on those reports amid
concern the web advertising company would be overpaying.
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.
Several analysts say that Groupon needs to raise money to
expand quickly because there are few barriers to entry in its
field and rivals are fast approaching. The New York Post last
week reported that Google is looking to buy smaller competitors
LivingSocial and BuyWithMe.
"Groupon is probably looking to get out and build a moat
around their operations as soon as possible," said Peter
Falvey, co-head of tech banking for Morgan Keegan. "That's
going to be expensive."
Justin Byers, head of business intelligence for VC Experts,
said that the $950 million authorization was the biggest his
firm had seen in at least 20 years. The recent record had been
Pixar's 1995 authorization of about $500 million, he said.
(Reporting by Jim Finkle; editing by Carol Bishopric)