Bloomberg is reporting Groupon’s valuation could now be pegged at $25-billion, according to confidential sources that spoke to the publication who were familiar with discussions taking place between Groupon and investment banks as the company looks for an initial pubic offering (IPO).

Groupon generates revenue by splitting revenue with merchants that offer deep discount limited-time deals exclusively for Groupon users. Groupon currently has about 75-million users, and the company continues to expand into new markets.

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Update: Groupon has raised $500-million (SEC filing) of the $950-million from various investors, including the New York City-based investment bank, Morgan Stanley (first time investor), among other partners.

The Chicago-based private and largest Internet consumer coupon service, Groupon, is planning to raise additional capital, up to $950-million by issuing new Series G preferred stock, according to a new securities court filing in a Delaware court.

Groupon would use the proceeds from the issuance to fund continuing operations and to help expand the company by entering new and emerging markets, either by acquisitions or simply by direct investment.

According to the court papers, the company changed its corporate licensing certificate to allow it to issue up to an additional 30.1-million preferred Series G which would value the firm at $4.75-billion.

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