Bloomberg reports that Groupon (GRPN), the top provider of daily deals online, has added six more banks to help underwrite its IPO. The banks are: JP Morgan (JPM), Barclays (BCS), Deutsche Bank (DB), BofA (BAC), Citigroup (C) and Allen & Co. A June 2 S-1 filing has shown that Morgan Stanley (MS), Goldman Sachs (GS), and Credit Suisse (CS) are current lead underwriters.
The reason why Groupon is including so many banks to its IPO may be related to the fact that while Groupon’s sales surged 14-fold to $644.7 million last quarter (2009 revenue totaled “only” $30.47 million), the Chicago-based company has seen its operating losses compound to more than $540 million since its founding in 2008. Groupon said in its S-1 filing that it expects its “operating expenses [to] increase substantially in the foreseeable future as [it] continue[s] to invest to increase [its] subscriber base, increase the number and variety of deals [the co.] offer[s] each day, expand [its] marketing channels, expand [its] operations, hire additional employees and develop [the co.’s] technology platform.” Groupon additionally faces a high level of competition in the market for daily coupons from countless rivals, including LivingSocial.com, as well as latest entrants Google Inc (GOOG), Facebook Inc. and Yelp Inc.
Groupon is seeking to raise $750 million in an initial public offering at a valuation of about $20 billion.