Amid 99.4% value loss Groupon appoints Czech Republic based new CEO

Image credit : Groupon Twelve years ago, Groupon rose to fame by introducing the concept of online group purchase. They did this by resolutely rejecting Google's $6 billion buyout offer and going public instead with a $17.8 billion market cap. Although the company claims to have 14 million active users, its financial status has been slowly deteriorating for the previous ten years due to stasis in its primary business model, failure to diversify, diminishing sales, and persistent losses. The most recent chapter of that story begins today. The Chicago-based firm has named Dusan Senkypl, a current board member, as interim CEO. The company's market valuation is currently barely $103 million, down 99.4% from when it first entered the public market. The business will be managed by Senkypl from the Czech Republic. According to a statement released by the business today, his appointment is effective right away. Kedar Deshpande, who led Groupon for just 15 months, is replaced by him. Deshpande spent more than ten years as an executive at Zappos prior to joining Groupon, and even after accepting the position, he maintained his Las Vegas base of operations. According to the business, he will continue working for another 60 days to aid with the changeover. Senkypl is a co-founder of Pale Fire Capital, a Prague-based PE firm with the same name as a Nabokov novel, perhaps? The majority of Pale Fire's investments are made in companies outside of its native Europe and other regions. Nonetheless, it is currently Groupon's largest shareholder, a position it has actively held: The two companies were involved in an activist battle last year, which led to the firm winning two board seats at the business, one of which is held by Senkypl. “Since he joined the Board, Dusan has been very engaged as a director, providing important oversight on Groupon’s strategy and strengths and helping the company identify areas in need of improvement,” noted Ted Leonsis, Groupon’s chairman, in an upbeat take on the news. Indeed. Pale Fire said in November that it was assisting Groupon in completely restructuring its IT team, beginning with the hiring of a new CTO from one of its other portfolio businesses. The wider pressures on the technology industry and the economy as a whole have not helped the business's position. During two tranches in August 2022 and January 2023, the company laid off about 1,000 employees, or nearly 30% of its staff. Particularly Groupon has encountered many difficulties over the years. The foundation of group buying is the idea of hype, which may have been a fateful or unfavorable starting point. Others questioned whether it could truly be categorized as a "tech" company even before it became a household name, despite forecasts that it would pose a challenge to Google and Amazon. Yet after completing more than 40 acquisitions, including numerous copies in other international markets, as well as a number of intriguing e-commerce and fintech companies, Groupon was unable to diversify further. Nevertheless, Google's shift in how subscription emails were classified caused the company's primary marketing channel, email, to almost disappear (and could be more easily ignored). Of course, scores of additional inventions and platforms have also been developed to appeal to customers who want to purchase the kinds of experiences and services that merchants like Groupon market. To turn this around, Senkypl and Groupon have a hard task ahead of them. But, the new CEO thinks there is still time to make the necessary adjustments. “I have a deep appreciation for the dedication that has gone into building this company and am honored to guide Groupon through its transformation and turnaround,” Senkypl said in a statement. “With unique local inventory, over 14 million active local customers and millions of visitor sessions per month, Groupon has valuable assets capable of fueling significant growth when paired with operational excellence. I am excited to build on that foundation to further scale the company’s marketplace and drive increased value for all stakeholders. I have built multiple businesses from the ground up that operated at scale with hundreds of millions of users, and I believe I know what we need to do at Groupon to take the company to the next level.”