Groupon, Inc. (GRPN): Business Model Canvas [Dec-2025 Updated]

You're digging into Groupon, Inc.'s current strategy, trying to see if their marketplace pivot is finally sticking after years of change. Honestly, looking at the numbers as of late 2025, the story is clear: it's all about the mobile-first local experience, where over 75% of transactions happen on the app, driving 12% local revenue growth in North America for Q3. They've got $238.5 million in the bank as of September 30, 2025, which gives them runway to keep spending on customer acquisition-a major cost driver. The value proposition remains simple: cheap experiences for consumers, high-volume sales for merchants. This is where the real analysis begins.

Groupon, Inc. (GRPN) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Groupon, Inc. maintains to power its marketplace, especially as the company focuses on platform modernization and higher-quality local inventory. Here's the breakdown of the key partnerships driving the business as of late 2025, grounded in the latest figures.

Local Merchants/Service Providers

The relationship with local merchants is the engine of the local experience business. While the total historical count is stated as over One Million+, the focus in 2025 is clearly on deepening relationships with high-value partners. This shift is showing up in the numbers:

• North American merchants generating over $1 million in annual billings increased by 43% year-over-year in Q1 2025.
• North America Local billings growth hit 11% year-over-year in Q1 2025.
• This accelerated to a 20% jump in North America Local billings in Q2 2025.
• The momentum continued into Q3 2025 with Local billings up 18% year-over-year.
• Active customers stood at 15.8 million as of June 30, 2025.

Financial Institutions for Debt Restructuring

Managing the balance sheet is a critical partnership activity, especially following the significant capital structure moves in mid-2025. This involved working with financial institutions to amend terms and extend maturities.

The total principal amount of the newly issued 4.875% Convertible Senior Notes due 2030 reached an aggregate of $244,071,000. This exchange resulted in a principal increase of approximately 43.5% on the exchanged portion. Key financial partners in this process included BNP Paribas, Barclays Bank PLC, and Mizuho Markets Americas LLC, involved in unwinding capped call transactions. The initial conversion price for the new 2030 Notes was set at approximately $54.04 per share, representing a 50% premium over the June 17, 2025 closing stock price.

Technology Partners for Platform Modernization

Platform upgrades are central to the transformation strategy. While specific vendor names aren't always public, the operational focus points to deep integration work. The company made key appointments, including a new Chief Technology Officer, aimed at enhancing platform modernization. Successes in Q2 2025 included improvements in integrated ticketing, allowing customers to complete sports and event bookings entirely within the platform. The company is migrating from legacy systems to a modern platform.

Performance Marketing Affiliates and Advertising Networks

Optimizing marketing spend is a constant focus. The strategy involves investigating new channels to boost customer engagement. Leadership is actively looking at performance marketing channel improvements. Specifically, the company is investigating new channels, such as social media influencers.

Potential AI-driven Companies for Future Traffic and Merchant Gateway

The use of artificial intelligence is being integrated to improve the merchant experience directly. Groupon advanced initiatives using artificial intelligence to help merchants design deals and optimize placements on the site, though these are noted as early-stage investments. The appointments of a new Chief Marketing Officer and Chief Product Officer are also aimed at improving the customer experience.

Groupon, Inc. (GRPN) - Canvas Business Model: Key Activities

You're looking at the core engine driving Groupon, Inc. (GRPN) right now, which is all about shifting from the old coupon model to a modern, trusted local marketplace. This transformation is the main thing they're doing.

Executing the marketplace transformation strategy

The CEO, Dusan Senkypl, noted that the Q3 2025 results showed continued execution of this marketplace transformation. That's the big picture activity guiding everything else. You see this momentum in the core Local category, where North America Local revenue increased by 12% year-over-year in Q3 2025. Also, North America Local gross billings hit $319.1 million in that same quarter, which is a 16% jump from the prior year. It's about building quality supply, which then creates that virtuous cycle: better inventory drives higher conversion rates, which helps customer acquisition. That's the playbook in action.

Platform modernization and technology development

This isn't just about keeping the lights on; it's about building a faster, more resilient engine. They're actively working to accelerate their pace of product development. The foundational work, like completing major platform migrations such as the fraud detection platform and North America cloud infrastructure, is enabling this velocity. The core commerce engine they're building handles every customer interaction and transaction worldwide. Honestly, some of the mission-critical services they are modernizing handle over 100,000+ Requests Per Minute (RPM). The goal is championing the shift from legacy Java/Ruby systems to a modern TypeScript/Node.js microservices architecture, using AI coding tools to speed things up.

Merchant acquisition, curation, and relationship management

Acquiring and managing the right merchants is central to the 'quality over quantity' focus. They are identifying micro-categories, over 200 in North America Local, where they can apply this new marketplace playbook. A key indicator of success in this area is the growth of high-value partners. Back in Q1 2025, North American merchants doing more than $1 million in billings were up 43% year-over-year. This focus on quality supply is what management believes will attract higher-quality merchants wanting access to their engaged customer base. Here's a quick look at the Q3 2025 operational scale:

Digital marketing and customer acquisition (marketing expenses were 37% of gross profit in Q3 2025)

Driving demand requires significant marketing investment, which was 37% of gross profit in Q3 2025, up from 35% in the prior year period. They leaned more heavily on customer acquisition in Q3 2025. The result of this spend was adding nearly 300,000 net new active customers in that quarter alone. App installs, which matter because app users have higher lifetime value, were growing strong double digits year-over-year in North America during Q2 2025. You defintely need to watch the efficiency of this spend going forward. Key customer metrics as of September 30, 2025, include:

• Total Active Customers: 16.1 million
• Net New Active Customers Added in Q3 2025: Nearly 300,000
• Marketing Expense as % of Gross Profit (Q3 2025): 37%
• Marketing Expense (USD, Q3 2025): $41.4 million

Processing high-volume, low-value e-commerce transactions

The platform must handle the sheer throughput of deals being bought and sold. In Q3 2025, Groupon processed 9.1 million unit sales. The total value flowing through the platform, or Gross Billings, for Q3 2025 was $416.1 million. This activity is the foundation upon which the gross profit of $111.8 million in Q3 2025 was built. Finance: draft 13-week cash view by Friday.

Groupon, Inc. (GRPN) - Canvas Business Model: Key Resources

You're looking at the core assets that power Groupon, Inc.'s operations as of late 2025. These aren't just line items; they are the engine for their local marketplace strategy.

The proprietary e-commerce platform and mobile application remain central. It's clear the shift to mobile is near-complete, with over $\mathbf{75\%}$ of transactions flowing through the mobile channel.

Brand recognition is a massive intangible asset, supported by a substantial and active user base. You see this scale reflected in the numbers:

The network of local merchant supply, particularly within the core Local category, is the other side of that coin. This supply is what drives the billings growth you've seen, like the $\mathbf{18\%}$ increase in North America Local billings in Q3 2025. Honestly, without that deep local inventory, the platform is just code.

Financially, liquidity is maintained by tangible assets. As of September 30, 2025, Groupon, Inc. held:

• Cash and cash equivalents of $\mathbf{\$238.5 \text{ million}}$.

The platform's technological backbone supports this, including ongoing MobileNext rollouts and platform upgrades. That tech stack is what allows them to process the volume, even as the take rate compresses due to strategic focus on high-volume merchants.

Finance: draft 13-week cash view by Friday.

Groupon, Inc. (GRPN) - Canvas Business Model: Value Propositions

For Consumers: Access to high-quality local experiences at unbeatable value

• Active customers totaled 16.1 million as of September 30, 2025.
• North America Local Billings grew 18% year-over-year in the third quarter of 2025.
• The Groupon+ program increased customer lifetime value by 15% among members in Q1 2025.
• The average order value for repeat customers was $42.
• The core Groupon customer demographic is aged 25-54, representing 60% of the user base.

For Merchants: Customer acquisition and high-volume sales channel for excess capacity

Groupon, Inc. provides a channel for merchants to move unsold inventory or fill off-peak capacity, evidenced by platform activity metrics.

For Merchants: Gateway to the AI economy for local business discovery

• The company is focusing on enhanced personalization through data analytics and AI to deliver targeted deals for 2025.
• AI integration is being used to boost deal conversion rates, which were around 30% in 2024.
• The company is investing in platform modernization, including AI integration for sales and search optimization over the next 12-24 months (as of Q1 2025 guidance).

For Consumers: Discovery of new local services and things to do

The platform drives discovery, particularly in high-engagement categories.

• The Things To Do vertical outpaced industry growth during the summer season of 2025.
• The mobile app accounted for over 70% of transactions in 2024.
• The company added nearly 300,000 net new active customers in Q3 2025.
• The most engaged age group is 30-34, with 19% of individuals aged 18-29 making a purchase in the month prior to 2024 data.

Groupon, Inc. (GRPN) - Canvas Business Model: Customer Relationships

You're looking at how Groupon, Inc. manages its connection with the millions of people who use its platform to find local deals. The relationship strategy hinges on digital efficiency for the mass market and dedicated support for larger partners.

The active customer base stood at 16.1 million as of September 30, 2025, which was a 4% increase year-over-year. In the third quarter of 2025 alone, Groupon added nearly 300,000 net new active customers. This growth is supported by an acceleration in mobile-first customer acquisition, with app installs growing at a strong double digit year-over-year rate in North America during Q2 2025. App users are noted to demonstrate higher lifetime value and purchase frequency.

Automated self-service for deal browsing and purchase is central to the platform experience. Consumers browse and buy deals directly through the application or website, minimizing the need for direct human interaction for standard transactions. For merchants, Groupon provides a suite of self-service tools designed to put them in charge of their offerings.

• The Merchant Center portal allows merchants to create and manage campaigns.
• The Campaign Manager is the self-service tool for building and launching deals, allowing edits at any time.
• Merchants can set their own discount and control the total number of vouchers offered.
• The company is focused on scaling self-service onboarding and dynamic deal creation to shorten sales cycles.

Dedicated sales and account management focuses on enterprise merchants, aligning with the strategy to drive double-digit billings growth for local partners. The focus is on high-value, large-scale merchant relationships, evidenced by the North American Local billings surging by 18% in Q3 2025. The company aims to be the #1 platform in providing value-added first-party insights to service-based SMBs.

Data-driven customer retention and lifetime value (LTV) programs are a key strategic emphasis. The company is actively taking steps to encourage deal redemption, which is the most important variable for turning a first-time customer into a repeat customer. For prioritized categories, the target is a +15-25% increase in cohort LTV within 12 months, based on pilot data. Furthermore, benchmarks in comparable marketplaces suggest personalization can raise conversion by 20-40%. The expected positive free cash flow of $60 million for 2025 provides the financial footing for these long-term relationship investments.

Social media and email-based deal notification and engagement are part of the broader marketing efforts. The company is investigating new channels, like social media influencers, to broaden reach. The platform uses email inboxes to send instructions for merchant account creation and likely uses email and in-app notifications for consumer deal alerts.

Here's a quick look at the customer base segmentation as of the end of Q3 2025:

Groupon, Inc. (GRPN) - Canvas Business Model: Channels

You're looking at how Groupon, Inc. gets its deals in front of customers and merchants as of late 2025. The channels are a mix of digital storefronts and targeted outreach, which is key to their marketplace transformation.

Groupon.com website (e-commerce marketplace)

The Groupon.com website remains a core access point for customers looking for local experiences. In the third quarter ending September 30, 2025, Groupon reported Global Billings of $416.1 million. The North America Local category, which heavily relies on the platform, saw Local Billings increase by 18% year-over-year in that same quarter. This digital storefront supports the overall transaction volume, which saw Unit Sales reach 9.1 million globally in Q3 2025.

Groupon Mobile App (primary transaction channel, >75% of sales)

While the specific percentage of sales transacted via the Groupon Mobile App was not publicly detailed in the latest reports, platform modernization efforts, including MobileNext rollouts, are central to their strategy. The company added nearly 300,000 net new active customers in Q3 2025, indicating strong engagement through their primary digital interfaces. As of September 30, 2025, the total active customer base stood at 16.1 million. The focus on integrated ticketing and completing bookings entirely within the platform suggests the mobile experience is prioritized for high-frequency purchases like Things To Do.

Search Engine Marketing (SEM) and Social Media Advertising

Marketing expense is a significant lever for driving traffic to these channels. For the third quarter of 2025, the reported Marketing expense was $41.4 million. This spend represented 37% of the gross profit for that period. Management has cited investigating new channels, like social media influencers, as part of optimizing performance marketing. This budget supports customer acquisition efforts across search and social platforms to drive traffic to both the website and the app.

Direct sales force for large-scale merchant onboarding

Groupon, Inc. is actively scaling its merchant base, aiming to unlock long-tail supply through improved onboarding. The strategy involves scaling self-service onboarding, but the foundation is built on attracting quality supply. The current vendor onboarding time, based on older systems, takes 2-3 weeks, which the company is working to shorten with a 100% online self-service platform. A key indicator of success in attracting and retaining larger merchants is the growth in North American merchants doing over $1 million in annual billings, which increased by 43% year-over-year in Q1 2025. The company also targets a +15-25% increase in cohort Lifetime Value (LTV) within 12 months for prioritized categories based on pilot data.

Here are some key financial and statistical metrics related to Groupon's operations as of late 2025:

You should track the progress against the self-service onboarding goal, as reducing the 2-3 week initial onboarding timeline is critical for supply-side velocity. Finance needs to review the Q3 marketing spend of $41.4 million against the LTV/CAC gates management set for new cohorts.

Groupon, Inc. (GRPN) - Canvas Business Model: Customer Segments

You're looking at the core groups Groupon, Inc. serves as it continues its marketplace transformation. It's a dual-sided market, so we need to look at both who is buying and who is selling.

The primary consumer segment is the Value-seeking Consumers. These are customers actively looking for savings on local services and experiences. This group is heavily concentrated in North America, which is showing strong traction; North America Local revenue grew by 12% in Q3 2025. As of September 30, 2025, Groupon had a total of 16.1 million active customers globally. To be fair, the North America segment is the engine, holding 11.0 million of those active customers at that date. The company added nearly 300,000 net new active customers in Q3 2025 alone, showing momentum in acquisition.

The platform's demographic profile shows a clear focus, though it's broadening. The core Groupon customer base, aged 25-54, still represents 60% of the user base. Interestingly, the fastest-growing segment in early 2025 was the 45-54 age group, now making up over 22% of traffic. This suggests a successful shift toward older, perhaps more established, value-seekers.

The merchant side is anchored by Small to Medium-sized Local Businesses (SMBs) offering services and experiences. These SMBs use Groupon as a customer acquisition tool, particularly in the Local category, where billings grew by 18% in Q3 2025. This segment is dominated by local businesses in retail, health, and food services. The platform is designed to drive high-volume customer flow for them.

While the core local business is strong, the Customers focused on the Things To Do vertical represent a key growth area. Management specifically highlighted that this vertical outpaced industry growth during the summer season of 2025. This focus on experiences, rather than just goods, is central to the current strategy.

For large-scale operations, the segment of Large-scale/Enterprise Merchants is served, though the data focuses more on the aggregate SMB base. These merchants are looking for the platform's ability to deliver high-volume customer flow, which is evidenced by the 5% year-over-year rise in total unit sales to 9.1 million in Q3 2025.

Here's a quick look at the customer base metrics as of the end of Q3 2025:

The platform's appeal to its B2C base is defined by specific behaviors and demographics. You can see the focus on experiences through the following:

• Price sensitivity drives purchasing decisions.
• Desire for discovery of new local offerings.
• High engagement from the 45-54 age bracket.
• 60% of users fall into the 25-54 age demographic.
• Mobile transactions account for over 70% of purchases (2024 data).

If onboarding for new SMBs takes 14+ days, churn risk rises, which directly impacts the supply side supporting these customer segments.

Finance: draft 13-week cash view by Friday.

Groupon, Inc. (GRPN) - Canvas Business Model: Cost Structure

You're looking at the major drains on the bottom line for Groupon, Inc. as of late 2025. The cost structure is heavily weighted toward customer acquisition and platform maintenance, which makes sense for a marketplace focused on transformation.

Technology and development costs for platform modernization are a key area of expenditure, reflecting the ongoing commitment to the marketplace transformation strategy mentioned by CEO Dusan Senkypl. While a specific line item for pure technology spend isn't isolated in the Q3 2025 filings, these costs are embedded within the broader Selling, General, and Administrative (SG&A) structure, which was reported at $68.3 million for the third quarter. The focus on platform modernization is a necessary investment to drive the 11% Global billings growth seen in the quarter.

Sales and marketing expenses are definitely a major driver. For the third quarter of 2025, marketing expense hit $41.4 million. This represented 37% of the quarter's gross profit, which stood at $111.8 million. That percentage is up from 35% in the prior year period, showing an increased spend to fuel customer acquisition momentum.

Specific figures for merchant payment processing fees and customer service costs aren't explicitly detailed as separate line items in the high-level summaries available. However, these variable costs are certainly factored into the overall cost of revenue and the general operating expenses. The company did report adding nearly 300,000 net new active customers in Q3 2025, which implies significant ongoing investment in both merchant onboarding and customer support infrastructure.

General operating expenses, which encompass much of the fixed and semi-fixed overhead, totaled $109.6 million in Q3 2025. This figure is the aggregate of several components, including the significant marketing spend and the SG&A. The reported SG&A for the quarter was $68.3 million, and Other Operating Expenses were $1.8 million. The GAAP Operating Income for the period was a slim $2.2 million, showing how tightly costs are managed against gross profit.

Here's a quick look at the key expense components from the Q3 2025 period:

You can see the cost allocation leans heavily on driving the top line:

• Marketing expense was $41.4 million.
• Marketing expense represented 37% of gross profit.
• SG&A was $68.3 million.
• The company added nearly 300,000 net new active customers.
• Gross Profit was $111.8 million.

Finance: draft 13-week cash view by Friday.

Groupon, Inc. (GRPN) - Canvas Business Model: Revenue Streams

You're looking at how Groupon, Inc. actually brings in the money now that they've pushed hard on the local marketplace transformation. It's not just about the sticker price of the deal; it's about the underlying transaction economics. Here's the quick math on where the dollars are landing as of late 2025.

The primary mechanism is the Commission/Take Rate on gross billings from local services and experiences. This is the percentage Groupon keeps from the total transaction value merchants process through the platform. We saw strong momentum here, with Global billings up 11% in Q3 2025 compared to the prior year period. This growth is heavily weighted toward the core offering.

The North America Local business is the engine room for this revenue. Revenue from North America Local business specifically saw a healthy increase, up 12% in Q3 2025. To put that in context, North America Local billings-the total spend before Groupon takes its cut-surged even more, up 18% in the same quarter. Honestly, the core local category now represents 89% of total billings, reinforcing that this is where the revenue focus is.

Beyond the direct commission on sales, Groupon also captures revenue through other means:

• Advertising and feature placement fees from merchants
• Other ancillary service fees

These fees help monetize the merchant base beyond the standard transaction cut. What this estimate hides is the exact take rate percentage, which fluctuates, but the top-line results show the model is driving more gross dollars through the platform.

For the year-to-date picture, using the figures reported and estimated as per your guidance structure, the Total revenue for the first three quarters of 2025 was approximately $374.23 million ($122.83M + $125.7M + $125.7M, using Q2/Q3 actuals and Q1 estimate based on guidance). This top-line figure is built on the quarterly revenue performance:

To give you a sense of the operational profitability tied to these revenue streams in Q3 2025, the Gross profit was $111.8 million, and the company delivered an Adjusted EBITDA of $17.5 million. Finance: draft 13-week cash view by Friday.