Groupon is already seeking strategic options for its Ticket Monster, and now seems to be exploring options for another of its Asian ventures, Groupon India. According to Media reports, Sequoia has invested $20 million in the Indian subsidiary of the e-commerce firm Groupon.
Groupon aims to make Indian branch more autonomous
Details about this deal have already been provided to some of the senior staff, but has not been made public yet, as reported by Ingrid Lunden of TechCrunch.
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Groupon India is expected to raise money through two more rounds of fundraising, one in 2015 and another in 2016, as a part of a long-term plan to move away from its parent company and become more independent.
Groupon India came into being after Groupon’s first ever acquisition, India’s SoSast. The business was initially named “Crazeal” owing to a domain dispute, but eventually Groupon regained its brand name in the market.
On the investment front, Sequoia stands out as the leading investor in India. So far in 2015, Sequoia accounted for about 12% of all Indian startup venture bonds and 33% of the total capital raised by these start-ups, according to data from CrunchBase.
E-commerce: opportunities and issues
One of the major challenges facing Groupon is that the management of e-commerce firms becomes difficult when they are decentralized, both in terms of the day-to-day reporting with advertising new techs and services, the report notes.
Moreover, due to the lack of a major investment by Groupon in its Indian branch, the business failed to live up to the expectations of its parent company. This was reflected in the company’s balance sheet, where the rest-of-the-world segment accounted for just $101 million of the total $925 million revenue collected. Moreover, Ticket Monster, another Asian subsidiary of Groupon, did not contribute much to revenue.
On a related note,, e-commerce is becoming a very big deal in India. Major names in the retail industry like Snapdeal and Flipkart are garnering billions by responding to the needs of the middle-class consumers willing to purchase goods and services online or through mobile phones.