Groupon, the daily deal site that has risen to infamy after rejecting a buyout offer from Google worth $6 billion, is on top of the world — for now.
To make sure things stay that way, the daily deal company is looking to raise more than $100 million in venture capital funding to fight off newcomers like LivingSocial, according to a report by Bloomberg News.
Groupon is the king of the hill, based on a recent Experian Hitwise blog post that showed that it received 79 percent of U.S. visits among 81 group-buying sites last week. But LivingSocial, another daily deal site, has been creeping up on Groupon and recently confirmed an earlier VentureBeat report that it was receiving an investment from Amazon worth $175 million.
Both Groupon and LivingSocial, as well as a host of imitators, now offer deeply discounted offers for services, meals, and group activities from local merchants that have previously struggled to reach new customers online. The sites make money by convincing businesses to offer steep discounts, then selling those discounts directly to consumers and picking up the difference. The biggest opening for daily deal sites, though, is a $133 billion market for local business advertising that they can make their own.
The newest round of funding would place Groupon’s valuation at less than $6 billion, according to the Bloomberg report. It was valued at over $1 billion following a large round of funding in April. Recent valuations peg the company as worth around $3 billion with around $500 million revenue.