Madison Reed has raised $32.1 million since launching 15 months ago.
Its chairman and vice chair will take over until a new CEO is named.
Faced with mounting financial losses, daily deal provider Groupon Inc. today ousted its CEO, Andrew Mason, who founded the company in 2008, Groupon said today.
The ouster of Mason comes a day after Groupon reported net losses of $81.1 million for the fourth quarter and $67.4 million for all of 2012, even as revenue rose 29.7% in the quarter to $638.3 million from $492.2 million a year earlier.
In Mason’s place, executive chairman Eric Lefkofsky and vice chairman Ted Leonsis have been appointed to a newly created office of the chief executive, effective immediately, the company said. The company’s board has already begun a search for a new CEO.
Colin Sebastian, an analyst who follows Groupon for private equity firm Robert W. Baird & Co., says the move should serve Groupon well. “It allows the company to refocus on growth opportunities, removes a distraction regarding Mason’s future, and in some respects could provide a fresh start,” Sebastian says. “Of course, a lot will also depend on who they bring as the new CEO and what their strategic priorities may be.”
“This was entirely expected,” adds Greg Sterling, founder of research and consulting firm Sterling Market Intelligence. “Mason was on shaky ground prior to the release of the Q4 numbers. Q4 disappointed investors and the stock took a hit. That was clearly the trigger for his dismissal.
“But to some degree he's being served up as a sacrifice,” Sterling says. “The market has shifted around Groupon and the company hasn't been able to shift its business quickly enough. Any new CEO will face the same challenges that Mason did.”
Lefkofsky and Leonsis said they recognized Mason as one who had helped establish the daily deals business, even if it was time to move on. "On behalf of the entire Groupon board, I want to thank Andrew for his leadership, his creativity and his deep loyalty to Groupon, Lefkofsky said. “As a founder, Andrew helped invent the daily deals space, leading Groupon to become one of the fastest growing companies in history."
Leonsis added that "Groupon will continue to invest in growth, and we are confident that with our deep management team and market-leading position, the company is well positioned for the future.”