Chicago-based Groupon, an international e-commerce marketplace that connects subscribers with services provided by local merchants and once rebuffed an acquisition offer from Google, is discussing its acquisition with a number of public firms, according to a report by the U.S. tech portal Recode.
Chinese e-commerce major Alibaba Group, which currently owns 6% of Groupon, as well as Nasdaq-listed holding company InteractiveCorp (IAC), whose chief executive Joey Levin is a Groupon board member, are highlighted as two potential candidates. IAC owns over 150 brands across 100 countries, mostly in the media and Internet sectors. To date, Groupon has declined to issue public comments on the matter.
Performance of Groupon (black) compared to the Nasdaq Composite Index (yellow) and Nasdaq-100 Technology Sector Index (blue)
Founded in 2008, Groupon began as a flash deals promotion site and listed on the Nasdaq at a valuation in excess of $16 billion. However, since then, it has consistently underperformed major Nasdaq indices and has seen a steady decline in its share price over the years.
The past three years have seen its revenue in steady decline, with the company posting a $66 billion loss in 2016. While revenue continued to fall from 2.9% in 2014/2015 to close to 6% in 2016/2016, reductions in revenue costs and operating expenses salvaged this poor performance, reversing its losses to post a $31 million profit in 2017.
Groupon is the first of its kind, the originator of the daily deal services, and once was the fastest-growing company in the history of the web. However, its business model has been proven unattractive both among consumers and investors.
Beijing-based Meituan, on another note, started as one of the first batch of Groupon copycats, gradually changed and expanded its business model from daily deals to food delivery and now even ride-hailing, now is looking to raise billions of dollars through an imminent initial public offering in Hong Kong.