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Portfolio October 3, 2011

Announcing our investment in Coupons.com

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We’re very pleased today to announce our investment in Coupons.com Inc.  Reid Hoffman and James Slavet collaborated on this investment for Greylock Partners. We’re excited to work with Coupons.com Founder/CEO Steven Boal and his team as they continue to build a substantial, market defining company.

It¹s rare these days to find a tech business where the reality actually exceeds the hype – especially here in Silicon Valley. By this we mean a company that is a clear market leader, with a rapidly growing business, but has focused their attention on execution rather than self-promotion. Based in Mountain View, Coupons.com is this kind of unusual company. We think it’s one of the Silicon Valley tech industry’s better kept secrets.

There were 330 billion coupons distributed in the United States last year. That’s right, 330 billion. Over 85% of these coupons were actually distributed through free standing inserts (FSIs) in the offline Sunday newspaper. As consumer readership and time spent continues to shift away from offline to online, the multi-billion dollar coupon industry is also shifting over to digital as a dramatically more efficient marketing channel.

Steven and his management team, drawn from companies like Google, Yahoo and Catalina Marketing, have been heads down building the foundation of a marketing services juggernaut. Coupons.com is the market leader in the digital couponing space, including online printable, social, mobile and loyalty card coupons. Their clients include virtually every major consumer packaged goods company, such as Kraft and General Mills, as well as almost every major supermarket and drug store chain, such as Safeway and Walgreens. Coupons.com provides essential infrastructure for marketers to migrate coupons online.  They provide an end-to-end technology platform to enable coupons to be safely and securely distributed, printed, redeemed, cleared and settled. Powering this essential infrastructure is a smart entrepreneurial path, and sets the stage for building very large company. Today, the vast majority of online coupons are printed through Coupons.com and through their network of partner sites.

The Coupons.com business is poised for a tremendous next chapter of innovation and growth. Steven and his team are embarking on an aggressive growth strategy, including rapidly expanding their product and engineering team, extending their product leadership in the mobile and social spaces with applications like GroceryIQ , and targeting select acquisitions. We think our experiences working with product-driven startups, and especially in social and mobile, will be a great mutual fit. The next generation of CPG and retailer Facebook fan pages and Twitter streams will be coupon-enabled. So too will the location-aware shopping list on your smartphone, complete with coupons that are redeemed right from your mobile device  Coupons.com will be the underlying platform that powers these offers, and ensures that they are secure, relevant and compelling.

We¹re excited that Steven and the Coupons.com team chose Greylock as a partner to assist in this next phase of product innovation and business growth.

“Based in Mountain View, Coupons.com is this kind of unusual company. We think it’s one of the Silicon Valley tech industry’s better kept secrets.”