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Techcrunch published a story early this week, which speculated that there was a significant drop off in revenues, month over month, from January 2011 to February 2011 respectively. It seems that Groupon elected to respond with actual numbers released today. Techcrunch - and others - have released updates of course. Yet, the initial hysteria seemed overdone. Didn’t anyone notice that even with the purported revenue drop off (now erroneous), revenues would have been up >4 fold (from ~$13MM to ~$60MM for Feb 2010 and Feb 2011, respectively)?
Hello, that’s pretty damn good for any company! And seasonality certainly could have factored into the variability. But, today, Groupon released some of its own numbers and the results are astounding. More than 8 fold grow year over year for January - from ~$11MM to ~$90MM, respectively. And for February, as mentioned, more than 7 fold growth year over year - from ~$13MM to ~$100MM).
So, the company could well be deserving of a 10X valuation, given a near 10X YoY growth rate. Granted such phenomenal growth is easier once the initial adoption chasm has been crossed and the exponential rise eventually levels out in the form of an S curve as it becomes increasingly difficult to grow at the same pace as the base (revenues, users, etc.) expands over time. But for now, I would expect this kind of rapid expansion to continue. Like the mobile advertising market and the search market in its infancy, these are still very early days.
Initial chart from earlier in the week (below).