Tech

GROUPON'S IPO ROADSHOW PRESENTATION: Here's What Groupon Will Be Telling Investors

Jay Yarow

2011-10-21T14:40:00Z

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.

Welcome to the presentation

Boilerplate!

More standard details on the offering ...

Andrew Mason takes over

He says Groupon has a platform for local commerce and these are the key drivers of business

A walk through of how Groupons work -- Offer a discount through email to millions of people daily

Merchants love Groupon because there is no other way to get thousands of new customers in one fell swoop, says Mason

Mason says Groupon's marketing spend is recovered in just two quarters

The cumulative revenue from customers grows and grows after the first up front payment

Again, Groupon's a platform to deliver customers

Groupon's model can be expanded to a number of verticals

Mason's favorite line: The local commerce market measured in trillions. It's "the largest market, and we're the largest business in it."

It's an international business

There are a lot of competitors out there ready to take on Groupon ...

... And it's not just the big boys, thousands of smaller companies are trying.

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.

The 5 areas of strength for Groupon

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.

Groupon has 6X the "heartshare" of its rivals, says Mason.

A look at the team: Filled with execs from a number of successful tech companies

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

RetailRoadshow

Some of Groupon's tech to help merchants

Next up! The product boss, Jeff Holden

Holden talks about Groupon's immense data and how it uses the data to deliver "smart deals" that are customized to the user. The smarter the deal, the more likely they user is to buy it. [In our opinion, this needs work, we get a lot of irrelevant deals sent to us]

Groupon Now is the next phase of the company. It's instant deals. It gives businesses a truer opportunity to bring in customers.

Holden says Groupon addresses the 3 core needs of businesses.

Groupon rewards is a new product, but it's a tech-based version of the loyalty card.

Next up: The CFO, Jason Child

He reiterates the drivers for Groupon's business/

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.)

Groupon is moving past the daily deal into new lines of business

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.