Groupon, which has lost 99.4% of its value since its IPO, appoints a new CEO… based in the Czech Republic

A dozen years ago, Groupon rose to fame by popularizing the online group buying format, confidently rejecting a $6 billion takeover bid by Google and instead going public with a market cap of $17.8 billion. The company now says it has 14 million active users, but its financial position has been slowly deteriorating for most of the past decade — with stagnation in its core business model, little success in efforts to diversify, falling revenue, and persistent losses.

And today comes the latest chapter in this story. The Chicago-based company, which today has a market cap of just $103 million (a 99.4% decrease from its IPO debut), has appointed Dusan Senkypl, a current board member, as interim CEO. Senkypl will lead the company… from the Czech Republic.

His appointment is effective immediately, the company said in a statement today.

He replaces Kedar Deshpande, who was CEO of Groupon for just 15 months. Prior to Groupon, Deshpande was an executive at Zappos for more than a decade, and after taking the job at Groupon, he continued to be based in Las Vegas. He will stay for 60 more days to help with the transition, the company said.

Senkypl is a co-founder of Pale Fire Capital, a Prague-based PE firm (and named after the Nabokov novel?). Most of Pale Fire’s investments are in companies outside of its home country and other parts of Europe. But it’s also currently Groupon’s largest shareholder — a role it hasn’t played passively: The two companies were embroiled in an activist struggle last year that resulted in the company being given two company board seats, one of which went to Senkypl holds.

“Since joining the board, Dusan has been highly engaged as a director, providing an important overview of Groupon’s strategy and strengths and helping the company identify areas for improvement,” noted Ted Leonsis, Groupon chairman, in an optimistic view of the news .

As a matter of fact. In November, Pale Fire announced it was helping Groupon rebuild its entire technology team, beginning with the appointment of a new CTO from one of its other portfolio companies.

The company has also undergone another fairly intense restructuring, though its position hasn’t been helped by broader pressures on the tech sector and the economy at large: it laid off around 1,000 employees, or about 30% of its workforce, in two tranches in August 2022 and January 2023.

Groupon has faced a variety of challenges over the years. The very concept of group buying is built upon the concept of hype, which may have been a fateful, unpromising starting point. Early on, and despite predictions that it could pose a threat to Google and Amazon, others debated whether it could legitimately be considered a “tech” company. But beyond that, Groupon — despite making more than 40 acquisitions, including a multitude of clones in international markets and a number of interesting e-commerce and fintech companies — hasn’t found other places to diversify.

Meanwhile, a key marketing channel for the company – email – died a small death when Google changed how subscription email was categorized (and made it easier to ignore). And of course, dozens of other platforms and innovations have sprung up, targeting customers who want to buy the kind of experiences and services that companies like Groupon sell.

Senkypl and Groupon have a big task ahead of them to reverse all of this. But the new CEO believes there’s still a way to fix what’s not working.

“I appreciate the dedication that has gone into building this company and am honored to lead Groupon through its transformation and turnaround,” Senkypl said in a statement. “With a unique local inventory, over 14 million active local customers and millions of monthly visitor sessions, Groupon has valuable assets capable of driving significant growth when paired with operational excellence. I look forward to building on this foundation to continue growing the company’s marketplace and increasing value for all stakeholders. I’ve built several businesses from the ground up, operating at scale with hundreds of millions of users, and I think I know what we at Groupon need to do to take the business to the next level.”

To give some context to these numbers, 14 million may sound like a big number, but remember that when the company first went public in 2011, it had more than 83 million registered subscribers, of which about 15 .8 million had bought Groupon offers. In other words, there’s a lot to do to get people interested in Groupon again.