Groupon Inc., the top online-coupon provider, filed to raise $750 million in an initial public offering, riding a wave of Web-company share sales and giving investors a chance to bet on the surging daily-deal market. 
 
 The IPO will be handled by Morgan Stanley (MS), Goldman Sachs Group Inc. (GS) and Credit Suisse Group AG (CSGN), according to the filing. Chicago-based Groupon, founded in 2008, will trade under the ticker GRPN. 
 
 Groupon has drawn increasing interest from Wall Street since December, when it opted to weigh an IPO instead of accepting a $6 billion takeover bid from Google Inc. As early as March, Groupon was in talks with bankers about an IPO that would value the company at as much as $25 billion, people familiar with the matter said at the time. Groupon is benefiting from demand for daily coupons, which provide discounts at local businesses like restaurants and nail salons. 
 
 “You need to have a war chest,” said Sandeep Aggarwal, an analyst with Caris & Co. in San Francisco. “You need to have that access to capital to maintain that level of growth.” 
 
 Groupon had an implied valuation of $5.6 billion at the end of March, according to research firm Nyppex LLC. 
 
 Groupon Chief Executive Officer Andrew Mason said in a memo to employees that going public would make it “easier to make big acquisitions” and that all full-time employees will get equity in the share sale. He also said employees should avoid any “forward-looking statements” about Groupon in the months before the filing, dubbing the IPO “Groubrangelina,” a riff on the nickname given to celebrity couple Brad Pitt and Angelina Jolie. 
 
 Copycats Abound 
 
 The company enjoys the benefit of pioneering the market for daily deals, which according to researcher BIA/Kelsey in Chantilly, Virginia, is set to generate $3.9 billion in sales in 2015, up from $873 million in 2010. 
 
 Groupon follows LinkedIn Corp., the No. 1 professional- networking site, which became the first major U.S. social-media company to sell shares to the public last month. Shares of the Mountain View, California-based company has surged 75 percent since its May 18 debut and is now valued at $7.5 billion. 
 
 Mason faces challenges in the market for daily coupons from hundreds of rivals, including LivingSocial.com, as well as recent entrants Google Inc. (GOOG), Facebook Inc. and Yelp Inc. 
 
 Groupon’s sales surged to $644.7 million in the first quarter, a 14-fold increase from $44.2 million a year earlier. 
 
 ‘Scary’ Marketing Costs 
 
 The company recorded a $113.9 million net loss in the period, because of a $208 million marketing expense and $178.9 million in selling, general and administrative costs. 
 
 “What was scary to me was the extent of that marketing expense,” said A.B. Mendez, a research analyst at GreenCrest Capital Management LLC in New York. “It’s not yet clear what their longer-term margins will be or when they will be able to get to consistent profitability.” 
 
 Subscribers increased to 83.1 million in the first quarter from 3.4 million a year earlier, and the number of deals sold jumped to 28.1 million from 1.8 million. 
 
 Groupon has deals in more than 500 markets worldwide, compared with 260 for Washington-based LivingSocial. The companies offer daily discounts of as much as 90 percent and keep about half the revenue, giving the rest to merchants. Groupon announced a partnership yesterday with Expedia Inc. (EXPE), offering U.S. and Canadian customers discounts of about 50 percent on stays at more than 135,000 hotels. 
 
 “One of the biggest criticisms of Groupon is their desktop component is easy to copy, and that’s true,” Mendez said. “They’re going to have to continue spending a lot of marketing, and they’re going to need to invest in technology.” 
 
 ‘Bunch of Money’ 
 
 Still, the company has managed to distinguish itself from rivals and it is likely to keep increasing revenue in the coming years, said Greg Sterling, an analyst at Opus Research Inc. in San Francisco. Groupon said in the filing that it featured offers from more than 56,000 businesses in the first quarter. 
 
 The potential market is “several million,” Sterling said. 
 
 “It’s a very dramatic story,” he said. “Unless they screw it up, they should be able to keep it going for some time until the business starts to mature. The early investors are going to make a bunch of money.” 
 
 The biggest shareholder is Green Media LLC, which is owned by co-founder Eric Lefkofsky and his wife, Elizabeth Kramer Lefkofsky. Green Media owns 21.6 percent of Class A shares and 41.7 percent of Class B stock. 
 
 Investors Poised to Gain 
 
 Rugger Ventures LLC, owned by the family of Groupon co- founder Bradley Keywell, hold 6.9 percent of Class A stock and 16.7 percent of Class B. New Enterprise Associates and Accel Partners own 14.7 percent and 5.6 percent of Class A shares, respectively. 
 
 Investors with less than 5 percent ownership include T. Rowe Price Group Inc., Andreessen Horowitz, Greylock Partners, Russia’s Digital Sky Technologies and Kleiner Perkins Caufield & Byers. Bloomberg LP, the parent company of Bloomberg News, is an investor in Andreessen Horowitz. 
 
 Groupon was valued at about $1.3 billion in April 2010, when it raised $135 million from Digital Sky and other investors. An investment of $950 million, completed in January, pegged Groupon’s worth at $4.75 billion. 
 
 To contact the reporter on this story: Ari Levy in San Francisco at alevy5@bloomberg.net 
 
 To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net ||||| Groupon Inc. filed to go public in a deal that could value the e-commerce company at as much as $20 billion, a hotly anticipated offering that could test the strength of a tech-investing frenzy. 
 
 The 2½-year-old company has grown at a torrid pace by pioneering a new approach to selling on the Web, offering daily deals to consumers in partnerships with local merchants. But it has been racking up huge losses, and such Internet powerhouses as Google Inc. and Facebook Inc. are moving to enter its business. 
 
 Groupon's filing, which offered the first inside look at its finances, revealed that while revenue surged to $644.7 million in this year's first quarter, the company has been spending a fortune to fuel that growth. It recorded a loss of $413.4 million last year, and lost another $113.9 million in the first quarter. Its costly strategy is reminiscent of the early days of Internet companies like Amazon Inc. 
 
 Groupon's filing comes on the heels of LinkedIn Corp.'s successful IPO, the latest sign of surging valuations for companies connected with hot Internet trends. The size of Groupon's losses may add fuel to the arguments that investors' appetite for high-profile tech offerings is becoming overheated, as it did before the first Internet stock-market bubble burst in 2000. 
 
 "It's totally like 1999," said Sucharita Mulpuru, an online-commerce analyst for Forrester Research. "To lose this money? What's crazy about these numbers is that this should be a highly profitable model." 
 
 Groupon's Chief Executive Andrew Mason, speaking Wednesday at The Wall Street Journal's D9: All Things Digital conference, didn't address the company's losses or the prospect of going public. But he expressed confidence that the company can stand up to the competition. He argued that Groupon's success is "largely due to the relationships that we have with local merchants, and it is a difficult thing to replicate." 
 
 Groupon didn't indicate exactly how much it intends to raise in its offering, which includes a placeholder figure of $750 million to compute a registration fee. People familiar with the matter have previously said the company could seek to raise close to $1 billion, which would value it at about $20 billion. The exact valuation will depend on market sentiment at the time of the offering. 
 
 Bloomberg News 
 
 As of March 31, Groupon's shares traded among institutional investors in private secondary trading at an implied valuation of $5.6 billion, according to Nyppex LLC, an intermediary in the secondary market. 
 
 If the public offering values the company at $20 billion or more, its three founders would wind up with a combined net worth, on paper, of more than $7 billion. Eric Lefkosky, the tech entrepreneur who helped found the company, owns 21% of the company's stock, which could be worth more than $4 billion. Mr. Mason, a co-founder, has a stake that could be worth more than $1.5 billion, and the stake of Bradley Keywell, a third co-founder, could be worth more than $1.3 billion. 
 
 IPO Booms and Busts Take a look at how the stocks of some high-flying internet firms fared in the first year after their IPO. Values are percent change from price at closing on the day of the IPO. View Interactive More photos and interactive graphics 
 
 Groupon was launched in 2008 as a side project for a website called The Point, which lets users run campaigns asking people to give money or do something as a group. The company's revenue surged as millions of people signed on to get discounts on everything from pedicures to horseback-riding lessons. 
 
 The filing indicates that Groupon had revenue of $713.3 million last year. Its $644.7 million of first-quarter revenue dwarfs the $3.3 million it notched in the second quarter of 2009. The company says it has deals with nearly 57,000 local merchants in 43 countries, taking a cut from each sale. It had sold more than 70 million "Groupons," or deals, by the end of March. 
 
 Mr. Mason has said his goal is to become the Amazon.com of local commerce, bringing online a huge portion of the retail economy that other Web companies have tried to tap, largely without success. 
 
 Groupon's filing is unapologetic about its spending, which has focused on marketing, sales staff and acquisitions. "In the past, we've made investments in growth that turned a healthy forecasted quarterly profit into a sizable loss," the filing warns. "When we see opportunities to invest in long-term growth, expect that we will pursue them regardless of certain short-term consequences." 
 
 Ms. Mulpuru of Forrester Research said Groupon's financials show that the daily-deal business is "incredibly labor-intensive" and that the company has been buying growth by hiring more salespeople. That means Groupon has few fixed costs and can easily cut expenses by firing employees, she said. 
 
 Some other observers are skeptical that Groupon can fend off competition. "It's not clear to me what their defensible competitive advantage is," said Cathy Halligan, a sales and marketing executive at PowerReviews Inc., which sells customer-review technology for e-commerce sites. 
 
 Besides Facebook and Google, Groupon's primary competitor is LivingSocial, a Washington company that analysts say has been steadily increasing its market share. Dozens of local imitators have launched around the country. Some newspapers also offer daily deals. 
 
 The Groupon filing was widely welcomed in Silicon Valley, where the IPO window was largely closed for years. After LinkedIn's successful offering, "the Valley overall is excited and there's a big rush to get companies out there while the window's open," said Jim Pitkow, chief executive of Attributor, a San Mateo, Calif., company that helps publishers track their content online. 
 
 Lou Kerner, an analyst with Wedbush Securities, said Groupon is spending rapidly to acquire more customers, betting that they will become repeat ones. 
 
 "The big question is will Groupon retain its leadership?" Mr. Kerner said. "Will Groupon be a Yahoo that was an early leader that basically became irrelevant? Or will they be an Amazon that built an early leadership and retains massive consumer value?" 
 
 —Stu Woo, Gina Chon and Robert Frank contributed to this article. 
 
 Write to Anupreeta Das at anupreeta.das@wsj.com and Geoffrey A. Fowler at geoffrey.fowler@wsj.com
– Groupon has raised $700 million in the biggest initial public offering by a US Internet firm since Google's 2004 IPO. The daily deals leader floated some 5% of the firm for $20 a share, above an initial range of $16 to $18, giving the company a market value of around $12.8 billion, Reuters reports. Groupon isn't making a profit, and there have been plenty of questions raised about its accounting procedures, leading many analysts to consider it overpriced. "It's a flashback to the late '90s. We've seen this game before and we know how it's going to end," an accounting professor tells CNN. Others see Groupon, which began trading on the NASDAQ Friday under the ticker GRPN, as a good buy. Groupon "is a company with permission to market to 150 million consumers daily. No other company in the world has ever had that type of reach," said the chief executive of industry tracker DailyDealMedia.