The Associated Press October 19, 2010, 4:29PM ET

Groupon gets $3.5 million investment from Illinois

Illinois Gov. Pat Quinn announced a $3.5 million investment package Tuesday for fast-growing online shopping company Groupon.

Company officials say the money will lead to 250 new jobs at its headquarters in Chicago.

The investment package includes a mix of corporate tax income credits over the next 10 years and job training funds.

"Groupon is truly owned by the state and owned by the city," said co-founder Eric Lefkofsky. He said the funding will help the company continue to expand.

Groupon has grown from seven employees in 2008 to more than 900 in Chicago and 2,500 worldwide. Company president Rob Solomon estimates the site has more than 25 million subscribers, and officials say its "deal-of-the-day" is offered in more than 300 markets around the world.

Groupon - a name that combines parts of the words "group" and "coupon" - features daily group discounts via the Web.

Local businesses offer potential customers deep discounts on products, services, cultural events and restaurants for a limited time, and only if a certain number of other people also take advantage of the deal.

Most deals are for 50, 60 or 70 percent off. Groupon and the local business share the resulting revenue.

Groupon has said it has about 30,000 clients whose products and services it offers.

Quinn said the state's investment through the Illinois Department of Commerce and Economic Opportunity is necessary to attract - and keep- rapidly expanding companies like Groupon in the state.

"This is a competitive environment," he said. "We want to encourage companies to create jobs here in Illinois."

The new Groupon jobs will be in departments including sales, marketing, software development and human resources, Solomon said.

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