The way the company works is that its staff of around 3000 people (mostly in sales) fans out to small local businesses. If they like what the business has to offer, the sales staff convinces the business to put up coupons on Groupon. The coupon works only if a certain number of people sign up for that particular deal. And people have certainly signed up. Groupon, as of December 2010, has 35 million members.
The employees in charge of writing the product or service descriptions are sometimes local improv comedians. This is reflected in their witty descriptions, for example, in an advertisement for a spa, it was described as a ''high-end follicle fashioner''.
The privately held company is estimated to have revenue of over $350 million in the beginning of 2010 and could reach $1 billion by year end. Forbes estimates its revenue at $500 million and some say it's already $2 billion, but in general nobody is sure how much the company is going to grow since it is growing so fast. In fact, Forbes has even called it as the fastest growing company of all time.
The Chicago-based company has been in the news recently for turning down Google's offer of $6 billion. Many venture capitalists have said that Groupon will regret passing up such a great offer. This offer was also the largest that Google has ever made for any company. This news broke out in the first week of December and three weeks later came the news that Groupon was able to raise $950 million in funding. Groupon previously was able to raise $135 million in funding in April 2010 from Digital Sky Technologies. This was in addition to the $40 million it has been able to raise since November 2008 when the website was launched.
Groupon's founder and CEO is Andrew Mason. He majored in music from Northwestern University in 2003. He started working in website designing for Eric Lefkofsky after graduation. He left that job to study public policy at the University of Chicago on a scholarship. Andrew dropped out of graduate school when Lefkofsky offered him a million dollars in ''seed funding''. Using that money Andrew started The Point, a now largely inactive web platform whose focus was on social causes. The Point evolved into Groupon when Lefkofsky and Andrew realized that The Point was not working as they had hoped.
Today, Lefkofsky holds around 30% of Groupon and his business partner Keywell holds another 10%. Andrew holds the rest of the stake. The owners are focused on building up the company as of now, instead of following a scale-and-flip model that a lot of people in Silicon Valley hope to achieve with their startup. Part of the reason maybe that he is in Chicago and plans on staying there for a while. As he said in a company news release ''Now there is no excuse to not work for us. And Chicago is still super cool. Did you know that we have the world's largest water-filtration plant? Great city, can't understand why people wouldn't want to move here, but whatever - now we're in the Valley too''.
