Groupon is an online marketplace which offers deals and discounts on travel, goods and services.
The eCommerce marketplace connects millions of subscribers with local merchants and retailers, offering discounts and deals on local attractions, activities and goods.
Serving more than 28 countries, Groupon was first launched in Chicago in 2008 as the brainchild of now ex-CEO Andrew Mason. Mason’s idea soon garnered the attention of his former employer, Eric Lefkofsky, who gave $1 million in seed money to help develop the idea. Just two years after Groupon launched, the company was valued at $1.35 billion.
Today, the company serves more than 500 cities worldwide with nearly 50 million customers searching over 425,000 active deals.
Who tried to buy Groupon for $6 billion?
Giving a new twist to the coupon world, Groupon works by offering different deals every day to its users, with every different deal a service, event or product. Usually, deals are only valid for a certain period of time, or if a certain number of people buy the deal within 24 hours.
Once the number of people required to make the deal valid is reached, the discount code or offer is activated. Groupon works on the coupon model of being a loss leader – this being any type of sale of discount that entices people to spend money. Usually the business will lose money because of the discount, but the hope is that the customer will spend more money on other things or become a regular.
Groupon has certainly enticed people to become regulars, with the online marketplace rapidly growing to such an extent that in 2010, tech giant Google offered $6 billion to buy the company. Groupon declined the mega-offer.