Venture-backed deal site Groupon sees steep market value drop


loss-graph-negativeGroupon, the daily deals website which attracted the largest-ever financing round for a startup two years ago, has seen its market value slump 25 per cent following a surprise loss in the fourth quarter.

Venture capital heavyweights including Kleiner Perkins Caufield & Byers and Andreessen Horowitz helped Groupon to the record $950m funding round at the peak of its powers in January 2011.

But the prospects of the online business have waned since amid increased competition and difficulties in the choppy European market.

Other venture firms to have backed the company in the past include Battery Ventures, Greylock Partners, Maverick Capital, Silver Lake, Technology Crossover Ventures and Russian investment firm DST.

The company’s latest results showed a one per cent share loss exclusing items compared to a slim three per cent expected profit according to Reuters.

Groupon’s fourth quarter revenue rose 30 per cent to $638.3m, but it has only forecast first quarter revenues of $560m to $610m.

That figure is below the $650m average estimate of analysts polled by Thomson Reuters I/B/E/S.