Groupon is Streamlining Its Technology Platform and Embracing Automation

Foundational improvements expected to accelerate pace of product development

Groupon, the trusted marketplace where consumers go to buy services and experiences that make life more interesting and deliver boundless value, is taking steps to simplify the company’s technology platform and lean more into automation. Ultimately, Groupon believes these changes will allow it to accelerate its pace of product development and support better customer and merchant experiences.

“We have amazing talent within our Product and Engineering organization, and I believe that we can do a better job leveraging our significant tech assets to create value for all of our stakeholders,” said Sachin Devand, CTO, Groupon. “Currently, our platform is too big and too complex, and this is prohibiting us from moving as quickly as I think we can to launch new products and features. So, I’ve empowered the entire tech organization to challenge our long-held thought process of creating a new service for every nuance and fundamentally rethink how we structure our platform––only building and supporting what’s mission critical to drive Groupon’s business forward.”

Devand, who was appointed to the CTO role in May after serving as a consultant since February, is working with the Product and Engineering organization to improve its operating processes and streamline Groupon's tech platform. Some of the team’s big 2022 initiatives include:

• Embracing Agility –– Reorienting the product engineering organization to be more customer centric. Product roadmaps will better align with providing specific customer solutions, more quickly. To that end, the entire team is embracing Agile software development methods, doing rapid delivery of features versus traditional methods that can take years. In addition, the team uses OKRs (Objectives and Key Results) to prioritize these features every 90 days.

• Migrating to the Cloud –– To date, Groupon has moved nearly 75% of its data center capabilities to the cloud. Groupon is already gaining operational benefits from the move to the cloud, including better monitoring, observability, elasticity and ease of deploying infrastructure. Once the migration is complete, the cloud will enable Groupon to scale infrastructure up and down as the needs of the business change, which should provide even more flexibility and cost savings. The cloud also enables Groupon to use cloud-native services that can unlock additional automation opportunities throughout the company’s marketplace.

• Re-architecting Services –– The company is re-architecting its services, taking stock of which services are required and which ones can be combined or eliminated. At the start of the year, there were about 700 services operating behind the company’s global marketplace platform, which is too complicated and big for Groupon’s needs. As the move to the cloud continues, Groupon intends to move to a domain-driven design model which will allow for a more nimble architecture with significantly fewer services.

• Leaning into Automation –– Groupon is automating processes throughout the entire business to create efficiencies and improve productivity. For example, the company is scaling its self-service automation features to enable more merchants to join the Groupon marketplace without human touch. At the end of the first quarter, 65% of new campaigns in North America were created using Groupon’s merchant self-service tool that enables businesses to create and edit campaigns. From a customer perspective, Groupon is doing more to automate insights from search data to create a feedback loop with the company’s sales teams to ensure that its marketplace has the right inventory in the right places.

When this work is completed, these actions should significantly reduce the size of Groupon’s tech platform and allow it to accelerate its pace of product development focused on building a larger and more differentiated inventory base and launching products to support better customer and merchant experiences.

About Groupon

Groupon (NASDAQ: GRPN) is a trusted local marketplace where consumers go to buy services and experiences that make life more interesting and deliver boundless value.

Note on Forward-Looking Statements

The statements contained in this release that refer to plans and expectations for the next quarter, the full year or the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations. The words "may," "will," "should," "could," "expect," "anticipate," "believe," "estimate," "intend," "continue" and other similar expressions are intended to identify forward-looking statements. We have based these forward looking statements largely on current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, but are not limited to, effects of the ongoing COVID-19 pandemic or other pandemics or disease outbreaks on our business; our ability to execute, and achieve the expected benefits of, our go-forward strategy; execution of our business and marketing strategies; volatility in our operating results; challenges arising from our international operations, including fluctuations in currency exchange rates, legal and regulatory developments in the jurisdictions in which we operate and geopolitical instability resulting from the conflict in Ukraine; global economic uncertainty, including as a result of the inflationary environment; retaining and adding high quality merchants and third-party business partners; retaining existing customers and adding new customers; competing successfully in our industry; providing a strong mobile experience for our customers; managing refund risks; retaining and attracting members of our executive team and other qualified personnel; customer and merchant fraud; payment-related risks; our reliance on email, internet search engines and mobile application marketplaces to drive traffic to our marketplace; cybersecurity breaches; maintaining and improving our information technology infrastructure; reliance on cloud-based computing platforms; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments; lack of control over minority investments; managing inventory and order fulfillment risks; claims related to product and service offerings; protecting our intellectual property; maintaining a strong brand; the impact of future and pending litigation; compliance with domestic and foreign laws and regulations, including the CARD Act, GDPR and regulation of the Internet and e-commerce; classification of our independent contractors or employees; risks relating to information or content published or made available on our websites or service offerings we make available; exposure to greater than anticipated tax liabilities; adoption of tax legislation; impacts if we become subject to the Bank Secrecy Act or other anti-money laundering or money transmission laws or regulations; our ability to raise capital if necessary; risks related to our access to capital and outstanding indebtedness, including our convertible senior notes; our common stock, including volatility in our stock price; our ability to realize the anticipated benefits from the capped call transactions relating to our convertible senior notes; and those risks and other factors discussed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2021 and Part II, Item 1A. Risk Factors of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, and our other filings with the Securities and Exchange Commission (the "SEC"), copies of which may be obtained by visiting the company's Investor Relations web site at investor.groupon.com or the SEC's web site at www.sec.gov. Groupon's actual results could differ materially from those predicted or implied and reported results should not be considered an indication of future performance.

You should not rely upon forward-looking statements as predictions of future events. Although Groupon believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither Groupon nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements reflect our expectations as of the date of this release. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in our expectations.

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