Why Goldman Sachs Group Inc (GS) is interested in Groupon Inc (GRPN)’s Ticket Monster?
Goldman Sachs Group Inc (NYSE:GS) has reportedly shown its interest in buying the Ticket Monster shares, Korea’s big social commerce company, from Groupon Inc (NASDAQ:GRPN). However, Ticket Monster said that they were yet to start the bidding process and they don’t have any information of Goldman Sachs intention to acquire it. It also remains to be seen whether Groupon would sell only a part of its stake.
Interest In Korea
Goldman Sachs has indicated its interest on the Korea’s mobile commerce space as it wanted to take advantage of the available opportunities. For this, it has already invested 40 billion won in a food delivery mobile application firm, Baedal Minjok, last month. Significantly, the app witnessed 14 million downloads till now while approximately four million deliveries were made every month.
Therefore, it wants to make its presence felt in Korea. Goldman Sachs is planning to buy Ticket Monster through its Principle Investment Area. Groupon enjoys complete ownership in Ticket Monster, and the world’s biggest social commerce company intends to divest a minimum of 20% stake. Groupon is also said to be keen to hand over the management control. It meant that it was not shy in selling more than half of its stake.
More Parties Interested
Ticket Monster indicated that there were a number of parties interested in acquiring it. However, it has not yet started the bidding process. It said that it would initiate the bidding process next year.
Shin Hyun-sung started the venture, Ticket Monster, along with his colleagues in 2010. In the first year itself, it became a big success. As a result, Shin took the opportunity to sell it to Living Social for 400 billion won in 2011. Living Social too sold it to Groupon for $260 million in 2013 amidst increasing marketing expenditures in the industry.
Last year, Ticket Monster generated sales of 114.9 billion won. However, it suffered an operating loss of 70.8 billion won. As a whole, the industry is facing a tough competition among WeMakePrice, Coupang, and Ticket Monster. Competition and big marketing expenditures reduce opportunity for profitability.