A digest of the top business and technology news stories from the past week.
As Groupon files US$750m IPO, questions emerge over deficit
Three-year-old social commerce leader Groupon is aiming to raise US$750m in an IPO. However, questions have emerged over how a company everyone believed was turning over US$1bn actually lost US$413.
Groupon last week filed an S-1 with the Securities and Exchanges Commission for an IPO that will be underwritten by Morgan Stanley.
According to the S-1, Groupon had revenues in 2010 of US$713m and first-quarter 2011 revenues reached US$645m.
However, last year, Groupon racked up losses of US$413m.
The company, which started-up in Chicago, has more than 7,000 employees worldwide and last year spent US$241.5m on online-marketing initiatives.
That rate of spend on marketing seems to be accelerating, as the company spent US$179m on marketing so far this year.
Operating costs reached US$86m last year and so far this year appear to be slowing at US$17m.
The company grew at a rate of 2,241pc last year.
Major growth in IT outsourcing predicted
IT outsourcing is set for major growth, according to a new report by Prof Joe Peppard of Cranfield School of Management, which was commissioned by Irish-owned I.T. Alliance.
Peppard suggests there is a pent-up demand in the marketplace for technology which will cause the global tier one outsourcing firms themselves to increasingly look to trusted outsourcing partners.
“Computer hardware, software and telecommunications are building blocks of the modern ‘smart’ economy, as basic as iron ore and coal were to the industrial era and represent about half of all business spending on equipment.”
He said that during the downturn, organisations axed headcount and turned to IT outsourcing, which allowed them to fill in the gaps without having to commit to long-term fixed costs.
As the global economy recovers, organisations will need to further increase IT outsourcing in order to be able to respond quickly to market demands.
Sligo brothers’ cloud firm Eventovate raises €700k
Eventovate, a cloud services company focused on the hotel sector and set up by two returned emigrants from Sligo that last year made the TechCrunch Euro Top 100 list, has just completed a funding round of €700,000.
Eventovate’s investment includes funding from Bank of Ireland Start-up and Emerging Sectors Equity Fund managed by Delta Partners; High Potential Start-up Funding from Enterprise Ireland; and funding from the AIB Seed Capital Fund managed by Dublin Business Innovation Centre.
Brothers Jonathan and Jason Ruane have developed a pioneering, cloud-based software solution for hotels, to enable them to increase revenue and manage costs specifically within their events business, such as weddings. This award-winning technology provides a cohesive set of applications for both the hotel and its event customers.
The company will use the funds to drive further business growth in a European market estimated to be worth more than €260m per annum.
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