Attention Shoppers: Coupons.com Grabs $30M in Funding From Greylock
Among the hot and hyped Web 2.0 scene, not many would pick out 13-year-old digital promotions site, Coupons.com.
But, on the heels of a recent $200 million funding — which valued the quiet Mountain View, Calif., company at $1 billion — and a surging online discounting market, it has nabbed another $30 million from Greylock Partners.
Greylock has already invested half that amount, via a secondary market transaction, and is Coupons.com’s first venture investor. Its previous funders have been institutional investors.
“Coupons.com have been quietly building all the key infrastructure in this area,” said Greylock’s Reid Hoffman. “We think they are poised for the massive shift that is coming.”
The new funds, said its CEO and co-founder Steven Boal, will be used for a variety of things, including an aggressive mobile and social push for the longtime site.
“We are now focusing on hypergrowth,” said Boal, who noted that coupon clipping is perhaps the original social media. “Saving is kind of hip these days, even if we have been around for a long time with this exact focus.”
Coupons.com had already moved in the mobile/social direction with the 2009 acquisition of Grocery iQ, a mobile app that lets users manage shopping lists and discounts on phones.
There will be more to come, said Boal, who said the growth of the category is inevitable as consumers use these devices to manage their spending habits.
Coupons.com will also use the funds to expand its staff from 288 employees now to more than 450 by the end of the year, operating in about 13 countries. While Coupons.com has been profitable on a cash-flow basis, all the new initiatives will be costly.
And, while that kind of expansion could remind you of the explosive daily deals sector — and it is easy to put Coupons.com in the same highly competitive arena as Groupon — the company operates more as a platform and a white-label provider of discounting services to manufacturers and retailers, especially supermarkets and chain stores.
In fact, Coupons.com provides a lot of such services for them, garnering $100 million in revenue this year, up from $60 million last year and $40 million the year before. Much of that money is made when a customer uses its site or sites it powers and downloads a coupon for redemption.
One area of promising growth, said Boal, is managing discounts on Facebook’s social networking site, which is increasingly being used by consumer goods companies to test promotions and increase loyalty.
“It’s a really interesting area as product companies can be really nimble in managing their promotions,” he said. “And the ability to really drill down on the response of a certain sector of consumer is very powerful.”
It goes without saying that newspapers that previously dominated this industry have been on the wane.
The massive funding also sets up Coupons.com for a possible 2012 IPO, especially given its dominance — it serves nine out of 10 big grocery chains, four out of four pharmacy giants and such — in the digital couponing sector.
Presumably, there would be no discounts for that stock.
Here’s the official press release:
COUPONS.COM ANNOUNCES GREYLOCK PARTNERS INVESTMENT
Company’s Rapid Growth Including Mobile and Social Couponing Solutions to Benefit from Greylock’s Expertise
Mountain View, Calif. — October 3, 2011 — Coupons.com Incorporated, the recognized leader in digital coupons, including online printable, social, mobile and loyalty card promotions, today announced an investment by Greylock Partners. Coupons.com, which recently raised $200 million from institutional investors, is transforming the multi-billion dollar coupon industry and accelerating the shift from the newspaper to digital. The investment, a secondary market transaction, will enable the company to tap into Greylock’s expertise as it continues to produce market-transforming couponing solutions, including its mobile- and social-based products and services.
“We are very excited to work with Reid Hoffman and James Slavet and the entire Greylock team,” said Steven Boal, CEO of Coupons.com. “Greylock’s expertise and relationships will prove invaluable as we continue connecting brands with consumers via money-saving offers at every touch-point across the digital landscape — including web, social and mobile — and along the consumer’s entire path to purchase.”
“We’re very pleased with our investment in Coupons.com and are excited about working with the team as they continue to build a substantial, market-defining company,” said Reid Hoffman, Partner at Greylock Partners. “Coupons.com is almost single handedly transforming the multi-billion dollar coupon industry by ushering the newspaper-dominated business to digital. The market opportunity the company faces is immense, and we look forward to contributing in any way to their continued success, particularly in the context of social and mobile solutions.”
Coupons.com powers the vast majority of coupons printed online via a network of tens of thousands of sites in addition to their flagship site, Coupons.com, which is the 39th most trafficked site in the country. Coupons.com Incorporated is also the go-to resource for manufacturers wanting to coupon-enable their digital marketing initiatives, and virtually every major consumer packaged goods manufacturer resides on the company’s client roster. The company is aggressively building its team, expanding its full time staff from 288 employees in June to more than 450 expected by the end of the year, a growth of over 50 percent during the six-month period.
In addition to capturing a growing share of the multi-billion dollar newspaper-dominated coupon industry, Coupons.com is also expanding the couponing market by lowering the barriers to entry for companies to offer coupons, enabling smaller manufacturers — which could not place offers in the newspaper insert because of budget requirements or category exclusivity restrictions — to utilize coupons to engage with consumers. In addition, Coupons.com attracts a new demographic of coupon users, who engage with new couponing methods like digital, social and mobile coupons, but typically would not engage with traditional paper coupons.