Groupon Buys Another Small Tech Firm with Hyperpublic Purchase

by Trefis Team
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We wrote before that Groupon’s (NASDAQ:GRPN) tech purchases may continue, the company has acquired another start-up, Hyperpublic. [1] The latter focuses on generating location-based information for app developers and can be an add-on to Groupon’s location-based deal service, Groupon Now. Groupon leads the daily deal market and shares this space with players such as LivingSocial and Google (NASDAQ:GOOG) Offers.

See our full analysis for Groupon

Groupon Getting Stingier With its Cash

This trend of acquiring small start-ups at prices not exceeding tens of millions of dollars in indicative of two things. Firstly, as we wrote in Groupon Fights to Keep Users With More Tech Firepower, Groupon needs to urgently differentiate its deal offerings to keep consumers engaged.

Secondly, this may also be indicative of a resource crunch at the company, which is possibly hampering it from making large-scale acquisitions of daily deal clones, much like it did in 2010 and early 2011.

We have updated our analysis for Groupon with a $12.55 price estimate, which is well below the current market price.

Refer our note on why Groupon’s valuation has fluctuated significantly over the past two years.

Understand How a Company’s Products Impact its Stock Price at Trefis

Notes:
  1. Groupon Buys Local Database-Maker Hyperpublic, AllthingsD, 17th Feb 2012 []
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