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LivingSocial raises $110 million
The funding follows layoffs at the daily deal firm and an Amazon write-down.
LivingSocial has raised $110 million in a financing round that will increase reserves and fund strategic moves for the daily deal operator and Groupon Inc. competitor, according to an internal memo. The capital arrives only months after LivingSocial laid off about 9% of its workforce, and Amazon.com Inc. wrote down part of its stake in the discount provider.
In the memo, LivingSocial CEO and co-founder Tim O'Shaughnessy said the money comes from “many of our current investors” and also will help the company “solidify long-term plans.” Those plans, he continued, “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.”
In late November, LivingSocial laid off about 400 workers, most of them based in the United States and working sales and customer service jobs. About a month earlier, Amazon, in its financial report for the third quarter of 2012, said its net loss for that period included a $169 million write-down of the e-retailer’s stake in LivingSocial. According to an Amazon filing from earlier in the year, the e-retailer holds a 29% stake in the daily-deal operator; the stake was valued at $298 million.
Amazon, No. 1 in the Internet Retailer Top 500 Guide, did not immediately respond to a request for comment on the new funding for LivingSocial. A LivingSocial spokesman declined to comment on the companies or individuals involved in its new funding round.