Groupon turns to private investors to raise almost $1 billion
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TEXT OF INTERVIEW
JEREMY HOBSON: To the world of tech now. The online coupon site Groupon may raise almost $1 billion from private investors to fuel its growth. Reports say the company’s board of directors have approved the move — just a few weeks after Groupon reportedly rejected a $6 billion buyout offer from Google.
Marketplace’s Mitchell Hartman is with us live with details. Hi Mitchell.
MITCHELL HARTMAN: Hey Jeremy.
HOBSON: Okay, so tell us why this tech financing deal matter outside Silicon Valley?
HARTMAN: Because it shows just how huge this market is. Now here’s how this works because people often ask me. I get an email offer everyday from Groupon for a shop or a service here in Portland. Yesterday it was 50 percent off at a local climbing gym. I could’ve gotten 80 percent off of pilates classes, not for me but maybe for somebody. If Groupon raises another billion, it’ll value the company at roughly $7.8 billion — that is much more than Google offered. The company is expanding aggressively overseas, it’s already profitable. They’re moving into Hong Kong, Singapore, Taiwan. But there are a lot of cities and countries where you can’t get your morning Groupon. At least not yet. The potential’s huge.
HOBSON: Pilates could really blow up. Mitchell, Now, if Groupon raises the full $950 million from these investors, it would be by far the biggest Venture Capital financing deal since the mid-1990s. Does that signal anything broader about the health of the economy?
HARTMAN: Maybe not the economy as a whole, but definitely e-commerce. We saw again in shopping for the holidays — online retail up 15 percent. This may not indicate consumers are about to spend us out of recession. But I think it does say that if they’re spending, they’re going to do it and especially look for discounts online. And so investors who are searching out hot new technology trends are going to follow that with their money.
HOBSON: Alright, Marketplace’s Mitchell Hartman, thanks so much.
HARTMAN: You’re welcome.
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