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Groupon Could Go Public by End of 2011

Groupon, the social buying site that spurned a $6 billion takeover bid from Google earlier this month, has attracted several big institutional investors as it works to potentially go public in 2011, people briefed on the matter told DealBook on Wednesday.

Groupon
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Groupon

The red-hot startup is negotiating financing commitments from Fidelity Investments, T. Rowe Price and Morgan Stanley , these people said.

With its investor base expanding, Groupon is preparing to go public as soon as the end of 2011.

The new round of financing — which could reach as high as $950 million — could be closed in the next few weeks, according to TechCrunch. It also comes amid increased regulatory scrutiny of high-profile social-networking sites.

As DealBook first reported earlier this week, the Securities and Exchange Commission has requested information on the buying and selling of shares inFacebook, Twitter, Zynga and Groupon.

Since Groupon rejected Google’s takeover bid, many analysts have said that the Chicago-based startup would pursue another major round of financing and, eventually, an initial public offering.

The startup wasted little time: It amended its certificate of incorporation on Dec. 17, disclosing that its board had authorized a new financing round for as much as $950 million in preferred stock.

The company designated more than 30 million “series G” preferred shares with a price of $31.59 each. It also expanded the number of its voting common shares to 250 million.

The fast-growing phenom has become a hot commodity in Silicon Valley. Its valuation on secondary markets, where investors buy shares from existing shareholders like former employees, has tripled to $4.8 billion in the last six months, according to the advisory firm Nyppex.

Meanwhile, it has also drawn takeover interest from tech heavyweights. Earlier this year, Yahoo offered to buy the company for about $2 billion, people briefed on the matter said previously.

And Google raised its bid at least once during talks with Groupon.

Both Fidelity and T. Rowe have experience investing in nascent Internet phenoms. In 2008, the two teamed up to lead a $50 million investment in Slide.com, at a $500 million valuation.

(The investment didn’t pan out quite as they had hoped; Slide sold itself to Google earlier this year for less than $300 million, according to published reports.)

T.Rowe has also invested in Twitter, which recently raised a $200 million round of financing at a $3.7 billion valuation.

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