Groupon is an American worldwide e-commerce marketplace connecting subscribers with local merchants by offering activities, travel, goods and services in more than 28 countries. Based in Chicago, Groupon was launched in November 2008, and the first market for Groupon was Chicago, followed soon thereafter by Boston, New York City and Toronto. By October 2010, Groupon was available in 150 cities in North America and 100 cities in Europe, Asia and South America, and had 35 million registered users. By the end of March 2015, Groupon served more than 500 cities worldwide, nearly 48.1 million active customers and featured more than 425,000 active deals globally.

The idea for Groupon was created by now-ousted CEO and Pittsburgh native Andrew Mason. The idea gained the attention of his former employer, Eric Lefkofsky, who provided $1 million in "seed money" to develop the idea. In April 2010, the company was valued at $1.35 billion. According to a December 2010 report conducted by Groupon's marketing association and reported in Forbes magazine and the Wall Street Journal, Groupon was "projecting that the company is on pace to make $1 billion in sales faster than any other business, ever."

In its first earnings release as a public company, Groupon reported a 2011 fourth-quarter loss of $9.8 million on an adjusted basis, disappointing investors. Additional investor concerns arose after the company restated 2011 revenues downward in March 2012.

The idea that would eventually become Groupon was born out of founder Andrew Mason's frustration trying to cancel a cell phone contract in 2006. Mason thought that there must be some way to leverage large number of people's collective bargaining power. In 2007 Mason launched The Point, a web platform based on the "tipping point" principle that would utilize social media to get people together to accomplish a goal. The Point was intended to organize people around some sort of cause or goal. It gained only modest traction in Chicago, until a group of users decided their cause would be saving money. They wanted to round up people to buy the same product in order to receive a group discount. Founder Eric Lefkofsky wanted the company to pivot in order to focus entirely on group buying. Born from The Point, Groupon was launched in November 2008.

The name Groupon is a blend of “group” and “coupon”. Groupon's first deal was a half-price offer for pizzas at Motel Bar, a restaurant on the first floor of its building in Chicago.

The decision to focus on group buying proved wise. In just a year and a half, Groupon grew from a staff of a few dozen to over 350. Revenue and Booking also grew swiftly and the company was valued at over $1 billion after just 16 months in business, the fastest company ever to reach this milestone.

Fueled by its rapid growth, Groupon went public on November 4, 2011. It was the biggest IPO by an Internet company since Google in 2004.

Prior to the company's fifth anniversary, the Groupon website was completely redesigned and new features were added in November 2013. According to the SVP of product management, the original website was "designed for a deal of the day and the new site is designed for a marketplace." Following the website relaunch, the company rewarded a random selection of one million customers on November 20, 2013 with up to US$5,000 worth of "Groupon bucks".

Groupon recorded record-breaking holiday weekend sales in North America during the full (Black Friday through Cyber Monday) weekend of 2014 (Nov. 28 - Dec. 21), representing the most successful four days ever in the company's six-year history, with sales up more than 25% year over year. Black Friday and Cyber Monday were the two biggest days in Groupon's North American history.

Following Amazon.com's December announcement on drone delivery, Groupon reacted with a plan for "Groupon catapults".

On December 29, 2014, Groupon's shares rose by 1.4% after it was reported that Goldman Sachs was "weighing an investment in one of the daily deal company’s units."

Groupon named a new Chief Operating Officer on June 2, 2015, Rich Williams and in November, Williams was named CEO.

On September 22, 2015, Groupon announced they would be eliminating approximately 1,100 positions, primarily in their sales and customer service operations. As part of this restructure, they would also be ceasing operations in international markets such as Morocco, Panama, Philippines, Puerto Rico, Taiwan, Thailand and Uruguay.

In January 2016, Groupon signed a lease in Seattle for 42,000 square feet of space in the 1201 3rd Avenue building in downtown. This creates room for 400 employees, up from 300 that Groupon currently employs in Washington.

In May 2016, Groupon sued IBM, accusing it of infringing a patent related to technology that helps businesses solicit customers based on the customers' locations at a given moment. Groupon filed its lawsuit on May 9 with the federal court in Chicago, two months after IBM accused Groupon of patent infringement in a separate lawsuit.

In November 2016, Groupon began to reduce its area of coverage from 27 countries down to 15. It shut down operations in South Africa on November 4 of that year.

Groupon owns numerous international operations, all of which were originally deal-of-the-day services similar to it, but most of which were subsequently re-branded under the Groupon name after acquisition, including the European-based MyCityDeal (May 17, 2010), the South American ClanDescuento (June 22, 2010), the Japanese service Qpod.jp and Russian Darberry.ru (both acquired on August 17, 2010), and the Singaporean Beeconomic.com (November 30, 2010), which was founded by brothers Karl Chong and Christopher Chong.

Groupon bought the Indian deal-of-the-day website SoSasta.com in January 2011 and re-branded it as "Crazeal by Groupon Inc." The Groupon acquisitions of uBuyiBuy launched services under the Groupon name in Hong Kong. In addition, Groupon acquired GroupsMore.com to expand its business in Malaysia.

Prior to these acquisitions, Groupon had bought out the mobile technology company Mob.ly. The Point, Inc., the predecessor to Groupon, bought the trademark "GROUP-ONS" from its originator in February 2009 under terms which allow the originator and first registrant of the trademark to continue the use of the trademark.

On August 4, 2011, the company acquired Obtiva, a large Chicago, Illinois-based Ruby on Rails and Agile Software Development consulting firm for an undisclosed amount, in order to boost its technology recruiting capabilities.

In January 2012, the company acquired Mertado, a social shopping service based on the Facebook platform. In May 2012, Groupon acquired Breadcrumb, a point of sale system and iPad app that targets local restaurants. Based on the May acquisition, Groupon launched Breadcrumb PRO and Breadcrumb POS, expanding its target beyond restaurants to include all types of local businesses.

On September 24, 2012, Groupon acquired restaurant reservation and discount site Savored for an undisclosed amount, providing Groupon with an inlet to higher-end restaurants. Groupon also announced that it would continue to operate Savored independently from the main Groupon website.

In December 2013, Groupon acquired Boomerang, a Lightbank-backed startup that allows people to share gift cards and other deals from local merchants with their friends. Boomerang's two cofounders, Zachary Smith and Matthew Williams, along with eight employees went on to build a new digital-coupon offering, called Groupon Coupons.

On January 11, 2013, Groupon acquired real-time location sharing mobile app and small business service provider Glassmap, which was founded and led by Geoffrey Woo, Jon Zhang and Jonathan Chang. On September 9, 2013, Groupon announced acquisition of European last-minute travel app Blink (founded by Rebeca Minguela), which provides same-day hotel reservations.

On October 2, 2014, Groupon unveiled Snap, a new app specifically for giving customers cash back when they buy certain items at the grocery store. Snap asks shoppers to upload photos of their receipts after they've gone to the supermarket to buy groceries. Certain items are then eligible for discounts, which shoppers receive in the form of a cash-back deal. The new app comes from Groupon's previous acquisition of SnapSaves, a Canadian start-up that works much like Snap.

In November 2014, Groupon acquired In-Store Analytics And Marketing Startup, Swarm Mobile, a startup that helps businesses connect with and track their customers while in stores.

In February 2016, Chinese online retailer Alibaba Group Holding Ltd disclosed that it acquired a 5.6% stake in Groupon Inc.

In April 2016, Groupon Inc. announced it received a $250 million investment from a private investment firm, Atairos Management LP, which has ties to Comcast Corp. The firm was founded by former Comcast Chief Financial Officer Michael Angelakis, who launched the firm earlier this year with more than $4 billion in committed capital from Comcast.

In late October 2016, Groupon announced that it is acquiring daily-deals provider LivingSocial.

When it first launched, the company offered one "Groupon" per day in each of the markets it served. The Groupon worked as an assurance contract using ThePoint's platform: if a certain number of people signed up for the offer, then the deal became available to all; if the predetermined minimum was not met, no one got the deal that day. This reduces risk for retailers, who can treat the coupons as quantity discounts as well as sales promotion tools. In the early years before revenue splits began to adjust as necessary, Groupon made money by keeping approximately half the money the customer pays for the coupon. Currently, that split can vary depending on many factors.

For example, in a 50/50 revenue split, if $240 worth of home painting services are purchased by the consumer for $50 through Groupon, then the business gets $25 and Groupon keeps $25. There are certain businesses to which Groupon initially did not offer its services, including shooting ranges and strip clubs; however, shooting ranges have been featured on Groupon.

Unlike classified advertising, the merchant does not pay any upfront cost to participate: Consumers are able to search and browse deals via web or mobile and can subscribe to receive emails featuring deals they are interested in based on preferences they input.

Groupon employs a large number of copywriters who draft descriptions for the deals featured by email and on the website. Groupon's promotional text for the deals has been seen as a contributing factor to the popularity of the site, featuring a distinctive mix of thorough fact-checking and witty humor.

Groupon's primary customer base is female consumers with a college education.

There are potential problems with the business model. For example, a successful deal could temporarily swamp a small business with too many customers, risking a possibility that customers will be dissatisfied, or that there won't be enough product to meet the demand. Gap, a large clothing retailer, was able to handle 445,000 coupons in a national deal (although it experienced server problems at one point), but a smaller business could become suddenly flooded with customers. One coffee shop in Portland, Oregon struggled with an increase in customers for three months, when it sold close to 1,000 Groupons on the one day it was offered, according to one report. In response to similar problems, Groupon officials state that deals sold will be capped in advance to a number that the business can service effectively.

Groupon encourages new customers to try local businesses. 88% of merchants agree that their Groupon deal brought in new customers, and 82% of customers say they are likely to return to the merchant again.

In a 2011 TechCrunch analysis of Groupon, writer Rakesh Agrawal predicted that, over time, Groupon's merchant customer base would contract to only those businesses that could profitably exploit its business model, such as yoga studios or other services that could offer customers long-term subscriptions not bound by the Groupon terms. When the company reported in the second quarter of 2012 that its revenues had declined along with customer growth and the amount of money existing customers spent on the site, Slate tech journalist Farhad Manjoo said Agrawal had been vindicated. Agrawal's prediction, however, did not hold true as a more recent snapshot of the company shows consolidated revenue growing 24% year-over-year in 2014, in conjunction with active customers reaching 48.1 million and active deals reaching more than 425,000 globally.

In 2010, it was reported that local merchants found it difficult to get Groupon interested in agreeing to a particular deal. According to the Wall Street Journal, seven of every eight possible deals suggested by merchants were dismissed by Groupon.

Groupon offers a mobile application available on iPhone, Android, Blackberry and Windows Phone. It allows users to browse and buy deals on their phones and redeem them using the screen as a coupon. Groupon is now also a part of several Daily Deal Aggregators, which helps them expand their target audience, gain traffic and increase sales and revenue.

In February 2011, Groupon Russia announced it would join the Russian Company Mail.ru in order to start offering deals on its social network Odnoklassniki. This way, users would be able to buy and share deals from Groupon on their profiles.

In addition to daily local deals, Groupon’s current channels are: Groupon Goods, launched in September 2011, which focuses on discounted merchandise; Groupon Getaways, which offers vacation packages and travel deals; and GrouponLive, where consumers can find discounts on ticketed events—concerts, sporting events, theater, etc. (About Family Vacations recommends Groupon Getaways as an essential travel dealfinding site.)

Groupon has also emerged as a check on price increases for certain essential commodities in many countries. In September 2013, Groupon India announced that it would sell onions for ₹9 ($0.14) per Kg in a sharp contrast to the market price of ₹70-80 per Kg.

In January 2014, Groupon bought ideeli, a fashion company, for $43 million.

In April 2015, Groupon announced it is selling a controlling stake in the Korean online shopping platform, Ticket Monster, to a consortium including Anchor Equity Partners, KKR and TMON management. Groupon will continue to retain a fully diluted 41% minority stake in the company.

On July 16, 2015, Groupon announced its acquisition of food-delivery service OrderUp. Two weeks later, Groupon announced its own Food Delivery Business, Groupon To Go.

Groupon breaks into new markets by identifying successful local businesses, first by sending in advance a number of employees to research the local market; when it finds a business with outstanding reviews, salespeople approach it and explain the model, and use social marketing sites such as Facebook to further promote the idea. Groupon serves 500 markets and 15 countries, the many major geographic markets internationally include cities in the United States, Canada, Ukraine, Germany, Greece, France, the Netherlands, Belgium, the United Kingdom, India, Indonesia, Ireland, Israel, Italy, Poland, Portugal, Spain, Japan, Turkey, Mexico, South Korea, the United Arab Emirates, Romania, Singapore, Malaysia, Hong Kong, Mainland China, Russia, and South Africa. Groupon and an Australian company, Scoopon. The two companies agreed on an out of court settlement by July 2012.

On February 19, 2011 The Wall Street Journal reported that Groupon was preparing to launch in China. Groupon subsequently entered into the China market in a joint venture with Tencent and launched "Gaopeng". After a year of struggling in the established market, Goapeng subsequently merged with Futuan. Groupon is also expanding into the MENA region with its launch of Groupon UAE on June 16, 2011.

Groupon New Zealand launched on 10 May 2011.

Groupon entered the Indian market through the acquisition of local company SoSasta in Jan 2011. The Indian company was renamed Crazeal in Oct 2011 and CEO Ankur Warikoo was placed at the helm. Finally, after winning a battle to acquire the groupon.co.in domain name, the Indian business was renamed Groupon in Nov 2012. Groupon India is renamed as Nearbuy from 10 August 2015.

Groupon United Arab Emirates launched on June 15, 2011; Groupon Denmark launched on September 21, 2011; and Groupon Thailand launched on February 27, 2012.

In August 2015, Groupon gave up control of its India unit to Sequoia Capital, the Menlo Park-based venture capital firm. Groupon India is now known as Nearbuy and has a new website and mobile app

In November 2015, Groupon announced it is shutting down business in Sweden, Denmark, Norway and Finland. Groupon also recently closed in countries including Morocco, Panama, the Philippines, Puerto Rico, Taiwan, Thailand and Uruguay.

Worldwide, there are over 500 sites similar to Groupon, including over 100 in the United States. However, by December 2010, only one competitor, LivingSocial, had been described as a serious competitor; they used the same business model- Transaction fee model; according to one estimate, it received an investment from Amazon of $175 million.

In 2011, after reports surfaced on the subject, Google launched a competing product, called Google Offers, following its failure to purchase Groupon for $6 billion.

In April 2011, Facebook began testing a social-buying program. This move was speculated to be a competitive threat to Groupon, but Facebook ended the project by August 2011.

In October 2011, Adlibrium announced Adlibrium Dailies, the first free daily deal service for merchants which, according to estimates, reaches nearly 4 million consumers via email and mobile combined.

The growth of Groupon buying also created an increase of "deal comparison websites" such as Amazon Local. Amazon announced it was closing down Amazon Local in November 2015.

As of December 2015, Chinese startup unicorn Meituan is the largest player in the daily deals space. Its recent valuation is approximately $7 billion.

As Groupon looks to expand beyond daily deals to become a marketplace for local commerce, the company comes into competition with many large players. Groupon Goods competes with Amazon. Facebook is testing "Local Market", a buying and selling community powered by Facebook groups, that also indirectly competes with Groupon. "Local" is a hard nut to crack, and while many players seek to find a foothold in the space, Groupon continues to have a significant advantage because of its relationships with 150,000 local businesses in the United States alone.

New Enterprise Associates, Eric Lefkofsky and Brad Keywell are investors in Groupon (Lefkofsky and Keywell later formed the investment company Lightbank; Groupon is listed as a Lightbank investment). In April 2010, Groupon raised $135 million from Digital Sky Technologies, a Russian investment firm. On December 29, 2010, Groupon's executive board approved a change to Groupon's certificate of incorporation that would permit the company to raise $950 million in venture capital funding, based on a valuation of $6.4 billion. On June 2, 2011, Groupon filed to go public under the ticker symbol GRPN. The IPO was handled by Morgan Stanley, Goldman Sachs Group and Credit Suisse Group.

From January 2010 through January 2011, Groupon’s U.S. monthly revenues grew from $11 million to $89 million. Consolidated revenue for the full year 2014 reached nearly $3.2 billion.

In October 2010, Yahoo! was rumored to have offered over $3 billion to acquire Groupon. On November 30, 2010, it was reported that Google offered $5.3 billion with a $700 million earnout to acquire Groupon and was rejected on December 3, 2010. After the rejection of the Google/Groupon buy-out, Groupon proceeded with their own initial public offering.

Groupon’s consolidated gross billings for the full year 2014 increased 32% year-over-year to $7.6 billion.

In early November 2012, Groupon reported they had missed their third quarter revenue estimates, posting a revenue of $586.6 million while estimates were at $591 million. This caused Groupon's stocks to fall to as low as $2.93/share early in the trading day. Groupon has said to have lost 80% of its value since its initial public offering over one year ago. The stock has since rebounded and was trading around $8 in Q1 2015 before plunging as low as $2.15 in early 2016.

In 2011, Groupon developed an application, Groupon Now, aimed at smartphone and tablet users. The application consists of two buttons: "I'm Hungry" and "I'm Bored.” Once a user clicks on one of the buttons, the app then locates the closest and best deals for food or entertainment, respectively, using geolocation.

Groupon have the Groupon Promise to ensure that customers are satisfied with their purchase and if customers are disappointed with their purchase, Groupon will try to work things out with the customers or give them a refund.

On February 20, 2012, Groupon announced a "VIP Membership" program, with a membership fee of $30 annually. This program gives VIP members access to deals 12 hours earlier than non-members, as well as access to expired deals (in the "Deal Vault") and easy returns of deals (in exchange for "Groupon bucks").

Groupon MerchantOS is a suite of products and tools for merchants running with Groupon. The suite includes Groupon Rewards, Groupon Scheduler and Groupon Payments.

Groupon Rewards On May 10, 2012, Groupon announced the launch of Groupon Rewards in the United States. Rewards is a loyalty program for merchants to reward customers for repeat visits with a Reward of their choosing. Unlike “buy 9 and get the 10th free” punchcards, a consumer earns Rewards by using any major credit card saved in their Groupon account when they visit their favorite local merchants. When a customer spends an amount pre-determined by the merchant, the customer unlocks a Reward to use on a future visit. The rewards program was later removed due to lack of engineering support.

Groupon Scheduler Groupon Scheduler is an online booking tool for merchants, allowing their consumers to seamlessly book appointments for services at the time of purchasing their Groupon deal. This tool is targeted at merchants running deals where appointments are required, for example in the healthy and beauty industry or for classes and activities.

Groupon Payments The newest addition to the suite of merchant-facing products is Groupon Payments, which was launched in September 2012. Groupon Payments offers merchants an infrastructure for accepting credit card payments at a low cost.

As of December 2015, MerchantOS is no longer a Groupon division.

Groupon aired a controversial Super Bowl XLV advertisement in which actor Timothy Hutton begins by making a plea for the people of Tibet before delivering the punch line: "But they still whip up an amazing fish curry." Critics of the ad took to several social media outlets to argue that Groupon was using the plight of Tibetans to sell their services. The commercial angered consumers who described the ad with adjectives including "tasteless," "tacky," "vulgar" and "detestable". The following day, Groupon responded by defending their commercial and their philanthropic stance.

The environmental organization Greenpeace praised Groupon's Super Bowl ads. On February 10, 2011, Groupon's founder Andrew Mason apologized and pulled the ad.

In March 2011, Eli R. Johnson filed a lawsuit in federal court against Groupon, based on a claim that the company issues "gift certificates" that are not allowed under the Credit Card Accountability Responsibility and Disclosure Act. The act prohibits retailers from setting expiration dates less than 5 years after a card is purchased. The class action lawsuit was settled on December 17, 2012.

Some analysts claim that Groupon operates "like" a Ponzi scheme, according to interpretation of 2011 Initial public offering (IPO) documentation, because at the time it publicly disclosed that it is losing approximately US$100 million per quarter, had a net negative balance of $230 million, and used later investors' money to pay off earlier investors. However, Groupon earned nearly $3.2 billion in consolidated revenue in 2014 and had $1.1 billion in cash and cash equivalents at the end of 2014.

On August 10, 2011, Groupon updated its IPO filing, after facing scrutiny from regulators and analysts over its use of a non-standard accounting metric called Adjusted Consolidated Segment Operating Income. Critics argued that ACSOI was used by Groupon to present a misleading metric of profitability. Groupon's original IPO filing with ACSOI accounting showed a positive operating income of $60.6 million for 2010; after replacing the ACSOI metric with standard accounting metrics, Groupon's IPO filing reported an operating loss of $420 million for 2010.

Analysts also criticized Groupon's decision to pay out over $940 million of the $1.12 billion in venture capital Groupon had raised before the IPO - over 84% of its venture capital raised - as cash payouts to its 3 founders and early backers, rather than into the money-losing company. Co-founder Eric Lefkofsky alone received over $300 million in early 2011, just weeks before the company filed its IPO paperwork. The large cash payout also made Groupon technically insolvent when it filed for its IPO.

On October 21, 2011, Groupon set terms for its IPO on NASDAQ, planning to offer 30 million shares at $16–18. The terms implied a dealsize of $510 million and a valuation of $11.2 billion. On November 4, Groupon raised $700 million, 30 percent more than it sought, valuing them at about $12.7 billion.

As of 4 November 2011 Groupon was valued at $13 billion and the float was at 35 million shares going at $20 each whereas they were last priced at between $16 and $18. On their opening on Nasdaq, Groupon shares jumped more than 50 percent to a high of $29.52. However, on November 22, 2011 the stock price fell below its IPO level.

On Wednesday, July 11, 2012, just eight months after the company went public, Groupon's stock hit its lowest level since IPO at $7.72 and closed at $7.77. On Tuesday, August 14, 2012, Groupon's stock price dropped 27% and fell as low as $5.49. On Tuesday, September 3, 2012, Groupon's stock price closed at another all-time low at $4.15 dropping almost 80% below Groupon's IPO price ($20).

In March 2011, the Massachusetts Alcoholic Beverages Control Commission notified Groupon that it was in violation of state law that prohibits discounting of alcoholic beverages. Groupon notified Massachusetts subscribers of a temporary suspension in the use of its discount vouchers for alcohol at participating restaurants.

During 2011 there were reported breaches of British advertising regulations to the Advertising Standards Authority. In December 2011 the Office of Fair Trading (OFT) launched an investigation into Groupon after the firm broke regulations 48 times in 11 months.

The OFT concluded in March 2012 that Groupon was in "widespread breaches" of UK consumer laws and were ordered to "clean up their practices" within three months including ensuring its website was accurate, realistic, claims related to any beauty or health products offered were substantiated and that refund and cancellation policies were in accordance with current regulations.

The agency filed the lawsuit after a series of faults in the delivery and conditions of products and services sold to consumers.

In August 2016, the disagreements between the chilean National Consumer Service (Sernac) and Groupon were evident. Both decided to raise a collective mediation for a series of questions that the entity dependent on the Ministry of Economy for the services of the virtual platform. In spite of the negotiations, the negotiations did not arrive at good port. And a few days after Christmas, Sernac filed a class action lawsuit against Groupon.

According to the agency, Groupon breached the conditions offered and contracted with consumers, in particular due to non-compliance with deadlines offered and committed for the delivery of products or services. It even accuses it of not delivering the items purchased by consumers, with the consequent unilateral cancellation of purchases or having offered products and services without stock available.

This is compounded by the fact of dispatching articles of less value to the acquired or sending another product to the purchased, defaulting promotions and offers, "without respecting discount coupons offered and purchased by consumers," reads the lawsuit filed before the 18 ° Civil Court of Santiago.

According to revealed the Sernac in the judicial action, during 2016 the service received numerous claims against Groupon. As of December 20, these totaled 1,958, which resulted in legal action. "The defendant incurs a serious violation of the Consumer Protection Law, violating the basic and irrevocable right, which is the right to truthful and timely information that assists every consumer," said the letter.

In May 2010, Groupon created a challenge to live off Groupons for one year. The contestant Josh Stevens traveled throughout the United States and to the United Kingdom and purchased all food, drinks, travel, entertainment and more from Groupon for 365 days. At the end of the year, he received a prize of $100,000.

Groupon has moderate online presence in China, where Meituan.com and Dianping.com control most of the market share. Due to various economic factors and regulatory framework in China, local companies are more prevalent than Groupon, just as Baidu and Renren control a larger market share than do Google and Facebook.