Recent speculation of Digital Sky Technologies’ (DST) interest in an investment with Groupon have been realized as the company announced it has led the fourth round of funding for the U.S.-based collective shopping operation. The total amount raised in the round was USD 135 million, with DST contributing the lion’s share. The remainder was provided by Battery Ventures, a private equity firm based in Boston, Massachusetts. Both new equity capital and share buyouts from previous investors and employees are included as part of the financing package.
DST has indicated the funding will be used primarily to expand Groupon from North American markets into global markets. DST invests heavily in social networking and similar internet businesses, making their interest in Groupon a natural fit for their portfolio. The company is banking on the belief that social networking and “internet community” activities will drive the evolution of the next generation of internet opportunities. Underscoring DST’s global internet investment strategy are its holdings in Facebook and social gaming site Zynga, and their recent collaboration with China’s Tencent, the leader in that nation’s IRC market.
Groupon (www.groupon.com)
Groupon was launched in 2008 as a project of The Point, a Chicago based online community. Groupon is an online purchasing platform based on the collective-buying model which guarantees sellers a minimum number of transactions. The company name is derived from the practice of offering a targeted special “coupon” deal in each city where it operates. These targeted deals include consumer goods and services from spas, restaurants, entertainment venues, and more.
Groupon boasts 3 million current subscribers in 40 cities, with plans to reach 100 cities this year. Based in Chicago, Groupon employs more than 200 individuals.
23/04/2010
Internet, E-Commerce & E-Services, Investment, Private Equity News, USA