Groupon is hitting the road to sell the company to big investors. We’ve watched the roadshow and pulled all the relevant slides.CEO Andrew Mason drops the funny-man routine, and makes a pretty level headed argument for why Groupon will be a long term success.
Most pundits focus on Groupon’s massive losses, but Mason says those losses had to be front loaded into the business to achieve massive scale. Once Groupon establishes a customer, spending from that customer increases over time paying back the large upfront marketing spend.
Mason doesn’t make his pitch solo. He has two Groupon execs with him. Both execs left Amazon for Groupon, and they repeatedly compare the two companies.
We doubt this pitch will be enough to silence the numerous Groupon haters out there, but it’s a start. And more importantly for Groupon, it should be enough to raise $500 million through the public markets.
Merchants love Groupon because there is no other way to get thousands of new customers in one fell swoop, says Mason
But, Mason says there are high barriers to success, and the upstarts haven't made much of an impact.
This is the Groupon mascot: Half cyborg, half-human. Groupon is a mix of technology and human interaction.
Mason says operational excellence comes from being great at sales. We have 10,000 people thinking about getting deals in front of people. This is not a hobby for our sales people. They think about it all day long.
Mason says Groupon will drive results higher, and he says that in a sea of confusion about which deal company is legit, people come to Groupon because it's an established brand
Groupon Now is the next phase of the company. It's instant deals. It gives businesses a truer opportunity to bring in customers.
Groupon's revenue was up 426% on year over year basis. (That's revenue that it gets to keep, not gross billings, which is the total amount of sales that flow through Groupon.)
He addresses the biggest concern, and says marketing spend is falling. Part of the reason is that Groupon's virality is offsetting the need to spend money.
Childs says the balance sheet is getting stronger, and after the IPO it will have $743 million in cash on hand
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