Mail.ru, a London-listed internet services company, has avoided reinvesting in US-based discount coupon company Groupon’s $950m investment round.
Mail.ru had been a prior investor in Group alongside its former parent Digital Sky Technologies (DST) before its UK listing in November. However, while DST has reinvested, Mail.ru has not, Groupon said.
In a change to its press release, Groupon now says: "The [$950m] financing consists of several venture capital firms and late-stage investors, including Andreessen Horowitz, Battery Ventures, DST, Greylock Partners, Kleiner Perkins Caufield & Byers, Maverick Capital, Silver Lake and Technology Crossover Ventures…. Previous funding rounds were led by New Enterprise Associates, Accel Partners, Mail.ru Group and DST."
Hours earlier, Groupon had initially said: "The financing consists of several venture capital firms and late-stage investors, including Andreessen Horowitz, Battery Ventures, Greylock Partners, Kleiner Perkins Caufield & Byers, Mail.ru Group, Maverick Capital, Silver Lake, and Technology Crossover Ventures…. Previous funding rounds were led by New Enterprise Associates, Accel Partners, and Mail.ru Group (formerly DST)."
DST and Mail.ru’s spokesman by email said: "Some confusion with the release, for which apologies. Mail[.ru] was not involved in this round – the original release had a mistake. Mail’s focus is on the Russian internet and so future investments outside Russia will be made by DST Global."
He added in a call that Mail.ru had not informed the public that it would leave non-Russian deals to DST Global during the IPO due to US regulatory requirements but potential investors in the flotation roadshow were told.
The flotation followed the renaming of DST’s primarily Russian internet services assets under the Mail.ru brand from its broader portfolio of internet-related assets held by DST Global. However, Mail.ru retained stakes in some of these other, international assets, such as social media network Facebook and Groupon.
Mail.ru’s flotation saw a 30% share price rise in opening trading after its initial public offering (IPO) at the top end of its range, $27.70 per share. Mail.ru’s valuation has remained high at $40.73 in its last trade.
DST retained 35% of Mail.ru after its IPO, with South Africa-based media group Naspers, through its MIH corporate venturing unit, owning stakes in both DST and Mail.ru.
Groupon raised its targeted $950m in this latest round, which had initial reports that mutual fund managers Morgan Stanley, Fidelity and T. Rowe Price would take stakes, after rejecting a reported $6bn takeover offer from search engine group Google last month. Of the funding, $377m is being used for the company to grow and the remainder to buy shares from its existing owners and allow them to take some cash out of the company.
Groupon has already started using the money from the round’s initial close at $500m to buy up competitors round the world.
Groupon has this month bought daily deal sites SoSasta, Grouper and Twangoo to launch its operations in India, Israel and South Africa, respectively. Two former Google employees, Ananya and Udayan Bubna, set up SoSasta through their Friday Media digital media firm; Grouper was acquired for a reported $8m after launching in March; and South Africa-based Twangoo is separate to a Hong Kong-based company of the same name that offers coupons in Australia and Asia.
In the past year, Groupon expanded from 1 to 35 countries, grown subscribers by 2,500% from 2 million to more than 50 million and worked with 58,000 local businesses, serving over 100,000 deals worldwide.