Groupon files for IPO... But is it a tech company?

The two-year old Groupon has grown extremely fast and now wants to raise $750 million in its IPO. Good news for other tech companies. But is it a tech company?
Written by Tom Foremski, Contributor


Groupon filed for an IPO Thursday planning to raise $750 million reports The New York Times. The filing reveals very fast growth:

Shortly after launching in 2008, Groupon notched revenue of $94 million. Two years later, it had swelled to $713 million.

The company reported $644.7 million of revenue in the first quarter of 2011 alone, with 83 million subscribers across 43 countries, according to its filing.

A succesful IPO could boost prospects for the many private tech companies that are waiting to go public. But is Groupon a tech company?

Tech companies scale their business largely through adding servers and software, which is why VCs love to invest in them and that's why they shun investing in services companies where hiring lots of people is required to expand a business.

Groupon, the two-year old Chicago-based group shopping coupon service, now has more than 8,000 staff, at least half working in sales, says Andrew Mason, CEO speaking at the AllThingsD D9 conference. That's up from 1500 staff a year ago.

That sounds like a services company to me.

So why is Groupon lumped in with other tech high flyers, such as Twitter with 300 staff, Facebook with about 2,000, and Zynga with about 1300?

Why does Groupon have a tech company-like valuation of as much as $25 billion?

Or are services companies at the core of many new "tech companies?" For example, Cloud/SAAS companies can require a substantial number of staff:

- Salesforce.com has more than 5,300 staff and a $19.3 billion valuation.

- ADP has more than 47,000 staff and a valuation of $27.2 billion.

The scalability of tech is no longer the competitive factor in some markets.

(Hat tip @JeffNolan)

Groupon Said to Discuss IPO Valuation of Up to $25 Billion - Bloomberg

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