Groupon Raises $30 Million From Accel and New Enterprise Associates
Groupon.com is a local deal website that focuses on deep discounts. The deep discounts are applied for everyone if enough people apply the coupon. If not enough people apply the coupon, then nobody will get the deal. An example of where Groupon’s business model worked is when 1,600 people signed up for skydiving lessons in Chicago and each of them received 44% off. Groupon themselves are based in Chicago.
Groupon raised $30 million in VC funding from Accel and New Enterprise Associates. Groupon makes money by charging a fee to the local businesses. Group takes about 30-50% of the total price from each service. Based on these numbers, Groupon expects to make $100 million in gross merchandise sales by the end of 2010. The company was profitable in June 2009 which is only 6 months from the time that the company launched.
Chicago is the first city that Groupon launched in and since then they have expanded to 26 other cities. The company has 126 employees as of right now and over half of those are in sales.This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry