Why does Groupon leave Russia by selling its business to a large Russian company?

The American company Groupon sold the Russian division. Back in April, “we left Russia, selling an asset, so the number of countries [of Groupon’s presence] was reduced to 27,” said Brian Cayman, the company's CFO.

100% of Groupon Rus bought Leonid Boguslavsky's ru-Net investment fund. The medium-term strategy of ru-Net is to increase the profitability of Grupon’s business in Russia, to stimulate its growth through development in the regions, to invest in the “sales and technology department”.

The fund also owns the Biglion discount service and is a co-investor of the German discount aggregator service Cuponation . Biglion was the main rival of Groupon in Russia.
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The acquisition of Groupon's Russian business was made “in full compliance with the shareholder agreement of the holding company Biglion,” said Alexander Pavlov, ru-Net investment director. The fact that competitors have a common co-owner can help them: both Groupon and Biglion need to expand the customer base first and improve service, he told Vedomosti.

In 2010, the American Groupon bought a controlling stake in a similar Russian service Darberry for $ 50 million. In 2011, Darberry founders Victor Lysenko, Elena Masolova, Alexey Chernyak, Ivan Vladimirov and Oleg Kozyrev sold Groupon the remaining shares. So the company bought by Americans turned into Groupon Rus.

Coupon services mainly earn on the commission they receive from partners for the sale of their goods. In 2015, the commission of all coupon services amounted to 15–20 billion rubles, assessed Data Insight partner Fedor Virin. At 100–300% per year, as before, this market is no longer growing, adds KupiKupon co-founder and CEO Komil Ruzaev, “but if the company works well, its business can grow by 15–25% per year.”

Groupon’s share in the Russian market of discount services, according to Pavlov, is more than 30%, more than 500 thousand customers use the service annually. “We are particularly impressed with the results of the Russian Groupon in the travel segment, which already accounts for more than 50% of sales,” adds Pavlov.

On April 29, the shares of American Groupon collapsed in price at bidding in New York by 12.87% - up to $ 3.86 per share - after the publication of the company's forecast for 2016. During the session, the shares fell by 17% - to $ 3.66, this is their most significant intraday pullback since November 4.

On the eve, Groupon announced that, according to the company's forecast, revenue this year will be $ 2.75–3.05 billion, while analysts expected $ 3.01 billion with a minimum valuation of $ 2.9 billion.

At the end of 2015, Groupon announced that it intends to cut about 1,100 jobs around the world for the year and leave Morocco, Panama, the Philippines, Puerto Rico, Taiwan, Thailand and Uruguay. Even earlier, the company abandoned business in Turkey and Greece. Groupon has already turned its business in 17 countries.

The main market for Groupon is North America.

In the first quarter of 2016, the company sold goods and services for $ 1.47 billion (minus 5% year-on-year), its revenue was $ 732 million (minus 2%). On Wednesday, May 4, at the start of trading on the NASDAQ, securities of the company were trading at around $ 3.3 per share, capitalization was about $ 2 billion. After the IPO in 2011, the Groupon share was worth $ 20.