At one point, Groupon caught the eye of Google, which approached the company with a $6 billion takeover offer in December but was rebuffed, a source told Reuters at the time. Today, Google, Facebook, LivingSocial and a clutch of other Web companies are offering their own coupon programs. Moreover, Groupon noted in its filing it depends on existing partners and potential rivals like Google and Facebook to lure business.
"Groupon's had a lot of success in its early stages, but the model of group buying has limited barriers to entry and it's being replicated," said BCG Partners' Colin Gillis.
Groupon for now holds a clear lead over rivals such as LivingSocial, part-owned by online giant Amazon.com Inc. LivingSocial has about 26 million subscribers.
Filing an IPO while ahead, along with demand for consumer tech companies, should help Groupon raise money.
"The IPO window has been closed so long there's a backlog of demand," said Ethan Kurzweil, a vice president at Bessemer Venture Partners, which backed LinkedIn.
But whether Groupon can turn its popularity into profit is another matter. The company takes a cut from merchants that provide the coupons: in the first three months of the year its revenue totaled $644.7 million. But it incurred a net loss in the period of $146.48 million as it spent heavily to expand, both by acquiring customers and by signing up merchants.
"The growth is astronomical and clearly a lot of the money they're making is being plowed right back in the company," said Jacobs. "The biggest concern is going to be: is this kind of growth sustainable with a lot of new entrants in the market?"
While Groupon enjoys the spotlight trained on social media companies such as Zynga, it needs resources others don't -- a huge sales staff to enlist merchants and handle customer service.
Groupon disclosed in its filing that its staffing ballooned to more than 7,000 employees at the end of March from 37 in June 2009. Mason said it now had 8,000 employees.
Morgan Stanley, Goldman Sachs and Credit Suisse will act as underwriters.