grpn investor presentation
TRANSCRIPT
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Model Market Moats Advantages Results
December2011
InvestorPresenta3on
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Model Market Moats Advantages Results
ANoteFromOurLawyersAll statementsmade in thispresenta6on,other than statements ofhistoricalfact, areor maybe deemed tobe forward-
lookingstatements.ThesestatementsarebasedonGrouponscurrentplansandexpecta6onsandinvolverisks,uncertain6es
andotherfactorsthatmay causeouractualresults, performanceorachievementstobedifferent fromany future results,
performanceandachievementsexpressedor impliedbythesestatements. Informa6onconcerningtheserisks,uncertain6esandotherfactors iscontainedundertheheadingsRiskFactorsand SpecialNoteRegardingForward-LookingStatements
and Industry Data and elsewhere in the Registra6on Statement on Form S-1 of Groupon filed with the Securi6es and
ExchangeCommission.Forward-lookingstatementsarebasedoninforma6onasofthedatethestatementsaremade,andwe
donotundertakeanyobliga6ontoupdateanyforward-lookingstatementorotherinforma6on,whetherasaresultofnew
informa6on,futureeventsorotherwise.
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Model Market Moats Advantages Results
Drivers
Results
PowerfulModel
ExpandingthePlaGorm
EnormousMarket
DeepMoats
RapidCSOIMarginImprovement
Recordrowth
SignificantLeverage
InvestmentHighlights
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Model Market Moats Advantages Results
Performancebasedadver3sing,plusrepeatcustomersformerchants
4
TheDeal:Upto90%offproducts
andservices
TheTippingPoint:Oncereached,the
dealison
SocialMedia:Customerssharedealsthroughemail&socialnetworks
Editorial:Ourwriterscreateaccurate
andengagingdescrip6ons
FinePrint:Merchantsetstermson
quan6ty,redemp6onandexpira6on
1
234
5
12345
TheAnatomyofaDeal
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Model Market Moats Advantages Results
rouponWay
Cash&CustomersUpFront
RiskFree
LargeVolume
HighROI
Simple
EmailMarke3ng
OnlineMarke3ng
Print Broadcast
OldWay
PayUpFront&HopeforCustomers
WhyMerchantsLoveroupon
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Model Market Moats Advantages Results
MarryingSupplyandDemandThroughPriceandDiscovery
Consumers
MARKETPLACE
Fe
aturedMerchants
Two-SidedMarketplace
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Model Market Moats Advantages Results
AppliestoAllCategoriesLocalDeals Na3onalDeals Now!Deals
Travel Events oods
MoretoCome
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Model Market Moats Advantages Results
Note:Representsthe2011es6matesofGlobalInternetretail,leisure&recrea6on,foodserviceandonlineadver6sing.Source:Euromonitor2011andIDC2011 8
Local+Online+Adver3sing
SeismicShiZinHowCommerceisConducted
IntlRetail$9.T
USRetail$2.9T
IntlLeisure,Recrea3on&Food
$.9T
USLeisure,Recrea3on&Food
$1.4T
lobalOnlineAdver3sing$79B
Mul3-Trillion
EnormousMarketOpportunity
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Model Market Moats Advantages Results
AlreadyServingMarketsComprisingOver90%oflobalDP
Country
1stroupon
Sold
Mkt.Share
1 US Oct-08 #1
2 Canada Apr-10 #1
ermany May-10 #1
4 UK May-10 #1
5 France May-10 #1
6 Austria May-10 #1
7 Italy May-10 #1
8 Spain May-10 #1
9 Netherlands May-10 #1
10 Switzerland May-10 #2
11 Sweden May-10 #1
12 Poland May-10 #1
1 Turkey May-10 #1
14 Denmark May-10 #4
15 Finland May-10 #1
Country
1stroupon
Sold
Mkt.Share
16 Ireland May-10 #1
17 Norway May-10 #1
18 Belgium May-10 #1
19 Chile Jun-10 #1
20 reece Jun-10 #1
21 Portugal Jun-10 #1
22 Argen3na Jun-10 #1
2 Brazil Jun-10 #1
24 Mexico Jun-10 #2
25 Columbia Jun-10 #1
26 Japan Aug-10 #1
27 Russia Aug-10 #1
28 Peru Sep-10 #1
29 Taiwan Nov-10 #1
0 HongKong Nov-10 #1
Country
1stroupon
Sold
Mkt.Share
1 Singapore Nov-10 #1
2 Philippines Nov-10 #5
Uruguay Nov-10 #1
4 Israel Dec-10 #1
5 SouthAfrica Jan-11 #1
6 Malaysia Jan-11 #1
7 India Jan-11 #6
8 Romania Jan-11 #1
9 Ukraine Jan-11 #1
40 Australia Feb-11 #
41 SouthKorea Mar-11 #4
42 UnitedArabEmirates Mar-11 #
4 China Mar-11 #12
44 Indonesia Apr-11 #1
45 Newealand May-11 #2
Source:InternalCompanydataasof3Q2011.MarketshareisbasedontotalrevenuesastrackedbytheCompany9
lobalLeadership
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Model Market Moats Advantages Results
Execu3ngatUnparalleledScale
Na3onalandlobalLeaderwithSignificantScaleAdvantage
Markets NorthAmerica
July-September2011(Units)
TimeSinceLaunch
WinningAlltheWayDowntotheCitybyCityLevel
SanFrancisco
August-September2011(Units)
TimeSinceLaunch
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Model Market Moats Advantages Results
Opera3onalExcellence
Innova3on&Technology
Scale
Brand
Talent
HowWeWin
Model Market Advantages ResultsMoats
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Model Market Moats Advantages Results
DailyDealProcess
DetailsVejng
FactCheck
VoiceEdit
CopyEdit
ImageDesign
DealCrea3on
QualityAssurance
SiteEdits
Editorial
Merchandising
Strategy
DealSelec3on
DealLoading
andTagging
Deal
InventoryReview
MarketPerformanceEvalua3on
DealForecas3ng
City
Planning
CityCoverageStrategy
Subscriber&PurchaseMapping
Live/Work/BuyDistricts
DemographicsPrice/DistanceElas3city
Opera3onalExcellence
Innova3on&Technology
Scale
Brand
Talent
Qualityverifiedviawebandprimaryresearch
Checkmerchantwebsiteandreviewstocer3fypriceaccuracy
Humor
WeeklyDealPlan
Opera3onalExcellence
1
2
5
6
7
10
9
48
CityPlanning
Lead
Research
Sales
DealQualityAssurance
MerchantServices
FinancialForecast
Editorial
DealLaunch
CustomerService
Redemp3on
Management
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Model Market Moats Advantages Results
Opera3onalExcellence
Innova3on&Technology
Scale
Brand
TalentDealQuality
Allaboutcura6on Rigorousmerchantqualitycontrol
SubmiedApproved
UniqueEditorialVoice
DailyDealDescrip3on:LikeMikeTyson,wineisusuallyrobust,isoZenboxed,andshouldneverinfluencetaooingdecisions.
Trust
TheGrouponPromise
80%ofcustomerservicecallsansweredwithin30seconds
Averageemailrespondedtowithin4tohours
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AStrongandTrustedBrand
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Model Market Moats Advantages Results
Opera3onalExcellence
Innova3on&Technology
Scale
Brand
Talent
14
AndrewMasonCEO
JasonChildCFO
JasonHarinsteinSVPCorporateDevelopment DavidSchellhaseGeneralCounsel
BrianSchipperSVPHumanResources
JeffHoldenSVPProductManagement
RichWilliamsSVPGlobalMarke6ng
BrianToySVPEngineering&Opera6ons
AreatTeamtoLeadUs
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Model Market Moats Advantages Results
Customers
Merchants
Opera3on
s
1.0
2.0
Data
Opera3onalExcellence
Innova3on&Technology
Scale
Brand
Talent
Execu3ngonPreviouslyUnaddressableOpportuni3es
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Dailydeals
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Model Market Moats Advantages Results
MerchantMobileApp
ConsumerMobileApp
DealTypes Rewards
ROICalculator RubberbandMarke3ng
PlacesEarningsCalculator
Tooly Now!
Products
MerchantCenterOpera3onalExcellence
Innova3on&Technology
Scale
Brand
Talent
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Model Market Moats Advantages Results
TheDensityAdvantage
Loca3ngSubscribers
Targe3ngDeals
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Model Market Moats Advantages Results
On-demand,highlyperishabledealsLoca6on-basedsolu6onforconsumers
Inventorymanagementopportunityformerchants
roupon2.0:Now!
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Model Market Moats Advantages Results
rouponNow!
DailyDeals
rouponRewards
Loyalty&Reten3on YieldManagement
CustomerAcquisi3on
Triforce:TheFounda3onofrouponOS
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Model Market Moats Advantages Results
RewardsLoyaltyandReten3onforMerchants
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Model Market Moats Advantages Results
Q1 Q2 Q Q4 Q1 Q2 Q
$40
$1,157
496%Y/YrossBillings
rossBillings Revenue2010 2011
426%Y/YRevenue
Unprecedentedrowth
21
($millions)
Note:GrossbillingsrepresentsthegrossamountwecollectfromcustomersforGrouponssold
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Model Market Moats Advantages Results
Q2011Q22011
Rev
enueCompo
si3on
LongerTerm
100%DailyDeals
DailyDeals DailyDeals
etaways
DailyDeals
DiversifyingThroughNewCategories
22
oods
etaways
Live
Others
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Model Market Moats Advantages Results
Cumula3veCustomers(inmillions)
16
2
0
Q12011 Q22011 Q2011
78%
54%
40%
Q12011 Q22011 Q2011
Marke3ngSpendas%ofRevenue
ProvenMarke3ngLeverage
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Model Market Moats Advantages Results
=
$
Q22010
Contribu3onProfit
OurAverageCustomerSpentOver$170PerYearasofQ2011
Contribu3onProfit
ByQ2011
+$4Million
InvestmentInQ22010
-$18Million
19%
ROI
($millions)
+$6+$8
+$7
+$8
+$7
($18)
+$7
Q Q4 Q1 Q2 QQ2
Note:Contribu6onprofitdefinedasrevenuelesscostofrevenue,payrollandcommissioncostsandofflineandothermarke6ngcosts.AveragecustomerspendcalculatedasTTMgrossbillingsdividedbyaveragecumula6vecustomers
SignificantCustomerROI
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Model Market Moats Advantages Results
QuarterlyCSOI($millions)
$(22) $(22)
$(11)
$19
$(14)
$(98)
$(62)
$(2)
Q42010 Q12011 Q22011 Q2011
NorthAmericanCSOI TotalCSOI
NorthAmericanCSOI
Marginof+12%
DemonstratedOpera3ngLeverage
25Note:CSOIisanon-GAAPfinancialmeasurethatrepresentstheconsolidatedopera6ng(loss)incomeofourtwosegments,NorthAmericaandInterna6onal,adjustedforacquisi6on-relatedcostsandstock-basedcompensa6onexpense;for
areconcilia6onofCSOItolossfromopera6onsseeourRegistra6onStatementonFormS-1filedwiththeSecuri6esandExchangeCommission
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Model Market Moats Advantages Results
ThankYou