Reports: Groupon scaling back IPO

Daily deals giant now eyeing much lower valuation of about US$12 billion and offering under US$700 million, according to various reports.
Written by Vivian Yeo, Contributor

Daily deals giant Groupon has revised its valuation and now seeks a scaled-down initial public offering (IPO), according to reports.

The company is now looking at an offering of under 10 percent based on a valuation of close to US$12 billion, The New York Times said, citing sources with knowledge of the deal. The lower valuation, which contrasts with a previous high of US$30 billion, comes amid market volatility and criticism over the company's moves, it added.

Separately, the Wall Street Journal noted that Groupon was now valued at around US$12.5 billion, with the offering between US$500 million and US$700 million. The move was an attempt to reduce the amount of stock sold at what appeared to be a knock-down valuation, in hopes that more shares could be sold at a higher price in future, the report said.

Bloomberg's sources added that the Chicago-based company would start marketing its IPO to investors as early as next week.

In June, Groupon's IPO filing with the U.S. Securities and Exchange Commission revealed its intention to raise US$750 million.

The three-year-old daily-deal business had been plagued by a series of setbacks in recent months, including an accidental leakage of user names and passwords in India,  the exit of a second COO in a year, and accounting changes that saw its reported revenues plummet by half. In addition, it had some struggles in the nascent yet competitive daily deals landscape, most notably laying off hundreds of workers and closing operations in at least 13 cities for its joint venture in China.

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