Yelp hires Goldman Sachs, Citigroup as lead managers for possible IPO

San Francisco-based popular online site for local businesses, Yelp, which plans to launch an initial public offering early next year, is believed to have hired Goldman Sachs and Citigroup as lead managers.

With the gradual revival of the IPO market, Yelp is widely expected to formally announce its IPO soon.

Last week, Groupon, a popular daily deals site, Groupon raised about $700 million through its IPO – the largest technology firm offer since Goolge's over-subscribed IPO in 2004 that raised $1.67 billion and gave it a market capitalisation of over $23 billion.

The company, which like many other tech firms does not make much money, saw its valuations soar after listing to $16.5 billion. On the first day of trading, the scrip surged by 30 per cent to $26. Both Goldman Sachs and Citigroup were involved in the Groupon IPO. (See: Groupon raises $700 mn; valuation rises to $12.7-bn)

Yelp, which has been in operation since 2004, rejected a $500 million takeover offer from Google in 2009. Last year, Elevation Partners, whose investment team includes musicians such as U2 singer Bono and Roger McNamee, took a 20-per cent stake in Yelp for $100 million.

The PE firm has seen its initial investment of $270 million in Facebook Inc soar to $1.2 billion. Earlier, Yelp had raised over $50 million from venture capital firms including Benchmark Capital, Bessemer Venture Partners and DAG Ventures.