LivingSocial Raises $110 Million
LivingSocial has announced today that they raised $110 million. The company has raised a total of over $800 million since being founded in 2007. Investors in this round include Steve Case, Grotech Ventures, Revolution Ventures, U.S. Venture Partners, Lightspeed Venture Partners, JP Morgan, T. Rowe Price, and Amazon.com. Amazon previously invested $175 million into the company for a 29% stake.
LivingSocial CEO Tim O’Shaughnessy said that the investors “reinforced their support for the company through a new round of financing.” The company will be using the funding for marketing, technologies, and mobile. The company is also working hard towards achieving profitability. LivingSocial cut around 400 employees (10% of their workforce) back in November. Employees that were laid off include sales, customers, merchant services, and takeout/delivery groups.
LivingSocial’s revenue doubled in 2012 from $250 million to $536 million. However the company is operating at a loss. Unfortunately, the company saw a net loss of $650 million in 2012 compared to $499 million the year before. Amazon.com’s stake in LivingSocial declined to $52 million, which is down from the $175 million that they originally invested.
Below is the memo that O’Shaughnessy sent out:
We’ve got some great news to announce today, as many of our current investors have reinforced their support for the company through a new round of financing that will give us an additional $110 million to build our reserves, solidify our long-term plans, and execute against our vision for the future.
This investment is a tremendous vote of confidence in our business from the people who know us best, our current board members and investors. They have reviewed our plans for 2013, and they are enthusiastic enough to want to commit additional financial resources through this round. This round also follows a competitive process in which we were fortunate enough to have multiple options for funding.
As you know from our all-hands last month, we have an aggressive roadmap for profitability and expansion this year, and those plans include increased investment in areas like marketing, technologies, and mobile. This new investment round will allow us to dedicate the resources we need, while also building a significant cash reserve against unanticipated events or bumps in the road.
This new investment does not change our plans to reach profitability, and we believe that a cash-flow positive and growing company will give us even deeper resources to take advantage of new opportunities, extend our promising lines of business, and expand a robust funnel of new customers. We will be sharing regular updates on our results and progress against goals as we move forward.
We’ve had a solid start to the year, and I am excited about the opportunity to solidify our path to success over the next couple months. Thank you again for your hard work and dedication.