Groupon is a deal-of-the-day website that is localized to major markets in the United States. The first market for Groupon was Chicago, followed soon thereafter by Boston and New York City. As of November 2009, Groupon serves nearly 30 markets. Groupon debuted in November 2008 as part of The Point, a platform for collective action. Compete.com
cites Groupon as one of the top 1,400 sites on the Internet, with about one-third of its traffic coming from Facebook ads. According to quantcast.com
, Groupon has 321,000 unique visitors each month and is one of the top 6,000 sites on the Internet. On July 1, 2009, Groupon rolled out a new website design.
The idea for Groupon was created by, now CEO, Andrew Mason. The idea subsequently gained the attention of his former employer, Eric Lefkofsky, who provided $1 million in "seed money" to develop the idea. The site launched in November 2008
The company offers one "Groupon" per day in each of the markets it serves. The Groupon works as an assurance contract using ThePoint's platform: if a certain number of people sign up for the offer, then the deal becomes available to all; if the predetermined minimum is not met, no one gets the deal that day. This reduces risk for retailers, who can treat the coupons as quantity discounts as well as sales promotion tools. Groupon makes money by getting a cut of the deal from the retailers (typically 50%).
Groupon focuses on unusual, special or niche things in each market. Previous Groupons have included whale watching, personal trainers, teeth whitening, golf, cooking classes, sports and theatrical events, and a variety of bars and restaurants. Each day's deal is accompanied by an irreverent, tongue-in-cheek description, similar in style to Woot.
Groupon is built on ThePoint's collective action engine. Based on the concept of an assurance contract, the system works by a predetermined number of people joining a campaign or a threshold amount of money being pledged to it. Once that "tipping point" is reached, pledges (if any) are called in, and the action takes place. Groupon also works with the same model: a certain number of people need to sign up for the daily deal, or no one gets the deal. Founded by Andrew Mason, ThePoint debuted in January of 2007.
ThePoint and Groupon are partially funded by an investment from New Enterprise Associates, one of the largest technology investors in the United States. Eric Lefkofsky is also a lead investor.