Thursday 12 March 2015

GroupOn looking to raise $20 Million for its India arm from Sequoia

TechCrunch reports that popular local deals and ecommerce place GroupOn India, is now looking to raise a $20 Million round from Sequoia, to further consolidate its business in this part of the world. GroupOn India is the Indian arm of the U.S.-based parent company.
While GroupOn has already made clear that it plans an aggressive expansion in Asia, it is believed that the expansion is not just limited to a stake sell-off in Ticket Monster. GroupOn India, the Indian arm of the parent company in the U.S., is looking to pick up outside investment, and Sequoia is leading the push, with a $20 Million stake.
TC further reports sources saying that the deal has already been announced to the company’s senior staff, but is yet to be public. The strategy here is, to make GroupOn India, more autonomous from its parent company in the U.S., and raise two further rounds, which includes one more in 2015 and one in 2016.
Groupon India, which was formed as a result of the acquisition of Indian-born So Sasta in Februray 2011, hasn;t really been a profit making business for the parent company. So much for the fact, that rest of the world accounted for a meagre $101 Million of the company’s $925 million in revenues, and Groupon noted that Ticket Monster accounted for a large part of revenue growth (but also losses) in the region.
Though e-commerce continues to be a hot market in India, GroupOn hasn’t been able to successfully break into the field. While companies like Flipkart and Snapdeal continue to raise billions, GroupOn has been largely struiggling to break into mainstream e-com properties.
However, an investment as big as $20 Million (though no match for what Flipkart and Snapdeal and others have raised), could finally breathe in a fresh lease of life into GroupOn’s India business.
Noting and acknowledging that it is looking into options for its Asia business, Groupon sid on the last earnings report, that “it is exploring a range of financing and strategic alternatives for its Asian businesses, including Ticket Monster. As part of that process, multiple parties have expressed preliminary interest in Ticket Monster, although it is too early to comment on structure, pricing or the likelihood of a transaction, as the process is still underway”

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