Presumably because, like many a previous startup, revenue growth is fantastic. I agree with the HN consensus though-they have no real way of differentiating themselves from LivingSocial et all, so they will continue to have to pump lots of money into marketing ($208m in Q1!!), sales teams, etc and watch their margins go down over time.

Some startups (notably Amazon) use the money they raise to outrun competitors by subsidizing the product. Then, when they have the network tied up, they start making a large profit.

That's some pretty insane expenses. What are they wasting money on?

EDIT:

1) Ad spend: $200+ million

2) 7000+ employees (at $40K average per employee, that's $280M/year)