Coupons.com Gets $200 Million; $100 Million Is for Tech, Staff Development
With Groupon going public, the promotions space is getting tremendously revved up. Hoping to get in on the action are promotional relatives of the deals space, including providers of grocery “cents off” coupons, retail weekly sales (circulars), retail rewards and Buy One Get One Free. While most of these don’t do much with local advertisers, they do target local consumers, and they envision a general morphing of the space (to the degree that a cents off coupon for Park’s Sausages can morph into a Groupon night on the town).
Players include such entities such as Coupons.com, ShopLocal, iCoupons.com, Valpak.com, RedPlum.com, FindnSave, Savings.com, Clipper.com and YourBestDeals.com. Each has sought to integrate the various types of promotions together, sometimes with mobile and social solutions.
Today’s news is that 300-person Coupons.com is taking new institutional investment that will pump a whopping $100 million into its development (another $100 million will be given to employees and investors in an unusual liquidity event). The effort seeks to make the company an investment alternative (and in some ways, more rounded) to Groupon and others.
The Mountain View, California-based company, which was founded in 1998, claims a network of “tens of thousands” of websites across the Internet, including retailer sites that span 46,000 store locations, as well as affiliate publishers. The network includes consumer electronics, shopping carts and kiosks, as well as mobile apps. GigaOm (via Daily Deal Media) cites sources that suggest the company earned $50 million in 2010 and will earn $100 million this year. It also says the company’s valuation is pegged at $1 billion.
The investment will be used to add 100 people and “further accelerate the company’s growing momentum in shifting the newspaper-dominated coupons industry to digital as well as expand the coupon industry.”
The success of failure of the company, of course, ultimately depends on its ability to shift with the industry, which, pre-recession, had actually been moving away from coupons toward other customer acquisition methods.
Currently, Coupons.com is focused on digital coupons that must be printed out. But major efforts are afoot to integrate Coupons.com offers into social and mobile networks, where they might attract younger users.
The company says it is also looking to “reach across the digital landscape — everywhere brands and retailers can engage with consumers.” It already has a head start in mobile via the acquisition of Free State Labs LLC, the developers of Grocery iQ, a mobile shopping list application. NFC-based transactions on mobile phones are in the works.
Coupons.com also plans a new effort to enable “smaller manufacturers, which could not place offers in the newspaper insert because of budget requirements or category exclusivity restrictions.” International is also on the wish list. The company currently offers coupons and vouchers in 12 European countries through its 50 percent ownership of U.K.-based Couponstar Ltd.
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One would wonder how these “deals” companies even get profit but they are getting lots and lots of profit. I also patronize these deals’ websites. It would be a good exposure for a start up company or a company who wants additional exposure to make use of these deal sites to introduce/promote their services/their products.