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The following is a guest post by a fellow investor (mobile guru) whose interest lie within the mobile space, which is sure to be a big winner in the years ahead.
Groupon who has already raised $300M is currently either considering raising more funds that would value them at over $3B or possibly selling out to a number of potential suitors. Before getting to whom and why companies might be interested in buying out Groupon lets look at who they are and what they are really worth.
Groupon has been around only a few years yet they are growing at an unbelievable rate. Estimates for revenues for this year range anywhere from $150M to $350M. This is up from less than $10M for 2009. This kind of growth obviously attracts suitors but it also attracts competitors and there are a growing number. One of those, Livingsocial, seems to be roughly a year behind in its development which may very well make it a takeover candidate which could jump start its growth with the right acquirer. One of the questions that always must be asked when looking at potential competition is whether there are any barriers to entry. At first this answer seemed to be no but recent lawsuits that have been filed seem the make this question even more complex. Groupon was actually sued by a company called MobGob who accuse Groupon of infringing a patent they were issued in March called “Method of Community Purchasing Through the Internet.” This, according to the patent, is “a community purchase model where a product can be purchased a particular price only if enough buyers are willing to purchase at that price.” Or, put another way, Groupon’s entire business model. … [visit site to read more]
