SEOUL, May 31 (Reuters) - South Korea’s top group-buying site Ticket Monster said it is constantly getting takeover approaches in a booming market where industry valuations are still “cheap”.
“We get offers all the time... on a monthly basis from both international and domestic firms. Some of them are serious and we keep talking to them... But it really comes down to valuation,” Daniel Shin, chief executive of the one-year-old startup, told reporters on Tuesday. The 25-year-old Shin declined to name the suitors.
The popularity of so-called daily deals services has surged in an industry pioneered by U.S.-based Groupon a few years ago. The concept of online local discounts has spawned rivals including LivingSocial, with Facebook also jumping into the increasingly crowded coupon market. [ID:nN26285658]
Shin said taking his privately-held firm public is one of the options he is considering to meet massive funding requirement to expand internationally.
Ticket Monster now has around 45 percent of the Korea’s group buying site market, and has grown to about 2 million users in just a year, with 7.6 million daily page views on average.
But the industry is facing steep competition, as Groupon recently launched services in Korea to take advantage of the country’s high Internet penetration rate and already ranks among the top four players in the Korea’s increasingly crowded social commerce market.
Ticket Monster has some 460 employees and clocked $23 million in gross revenue last year.
A surge in valuation had triggered worries that the market in which consumers are offered daily deals promising big savings at local merchant, is getting too expensive. The sector’s valuations were still “cheap”, said Shin, who started the business a year ago just with five people and $10,000 in seed money.
“This market is much bigger than search market. This is huge and any number out there undervalues (the industry),” he said, adding that the industry’s transactions are currently valued at between 1 and 5 multiples of gross revenue.
With investors hungry to get a slice of social media companies, Groupon is planning an initial public offering that could value the firm at $15 billion to $20 billion, a source said last month. [ID:nN14107204] The move comes after reports that Groupon was in talks to sell itself to Google Inc for up to $6 billion. (Reporting by Miyoung Kim; Editing by Anshuman Daga)