Daily deals Web site Groupon Inc. saw its revenue surge to $760 million last year from $33 million the previous year, with more than a third of its 2010 sales coming from outside the U.S., according to an internal memo.
The e-mail, sent by Groupon Chief Executive Andrew Mason to staffers in early January, also reveals the founder’s grand ambitions for the company started three years ago. Mason writes that he hopes to achieve “billions in revenue” in 2011.
“By this time next year, we will either be on our way to becoming one of the great technology brands that define our generation, or a cool idea by people who were out-executed and out-innovated by others that were smarter and harder working,” he wrote in the message, which was reviewed by The Wall Street Journal.
Mason and a Groupon spokesman didn’t respond to requests for comment.
Groupon is one of a handful of Internet companies, including Facebook Inc., Twitter Inc., and LinkedIn Corp., which have had investors keening for private placements or an IPO. The scramble has fueled a spike in valuations of these companies.
The Chicago-based company spurned a $6 billion takeover bid from Google Inc. in December and went on to raise $950 million in financing from private investors this year. It is also preparing for an initial public offering later this year that could raise $1 billion, people familiar with the matter have said.
Groupon had grown to more than 4,000 employees and to 565 cities at the end of 2010, up from about 120 employees and 30 cities in 2009, according to the memo. Some of that growth has been fueled by the acquisition of rivals in Europe and Asia. Overseas activity represented about $285 million of its revenue last year and almost three-quarters of its employees.
Mason told his staff to beware of complacency, warning that “clones” and large technology companies, will commit significant resources to taking away Groupon’s market share. “If you feel a little like Frodo climbing Mount Doom, you can’t be blamed,” he wrote, a reference to the protagonist of “Lord of the Rings.”
The company, known primarily for offering online coupons for local merchants, is also moving to generate sales from national retailers. According to the memo, “national deals” accounted for 12 percent of revenue in the fourth quarter of 2010.
Groupon has 51 million subscribers to the e-mail it sends to promote deals and hopes to increase that number threefold, to 150 million, by the end of this year. The company also hopes to generate more revenue that doesn’t rely on this blast. In the memo, Mason wrote that he hopes for, “at least $1B in revenue from new products we launch in 2011, not just the current daily e-mail.”