History
LivingSocial was founded as Hungry Machine in 2007 by four employees from Revolution Health. The company first gained notoriety for their Visual Bookshelf application on Facebook which allowed users to catalog and share their favorite books with friends. Later, the company released PickYourFive and other Polls applications, making LivingSocial the number one application developer on Facebook as measured by page views. After acquiring BuyYourFriendADrink.com in 2009, LivingSocial launched a daily deals business, which since has become its highest grossing venture to date.
Most recently, LivingSocial completed a $400 million round of funding. Investors said the latest round values LivingSocial at $3 billion. The company is currently booking $1 million a day and is projected to book in excess of $500 million in revenue in 2011 and nearly double its market presence.
[edit]Highest Grossing LivingSocial Deals
Amazon On January 19, 2011 LivingSocial offered a deal with Amazon, which offered LivingSocial subscribers a $20 Gift Card for just $10. The deal was available nationwide and attracted 1.4 million purchases.
Fandango On March 2, 2011 Living Social offered two tickets for $9 via Fandango’s ticket service for any movie; LivingSocial sold 1 million tickets in two days, 780,000 tickets on the first day alone.
Products
Daily Deals
Daily Deals are handpicked experiences that can be shared with friends. “Consumers find hometown deals they like on the sites, sign up, persuade others to do so, then get a cut-rate dinner, haircut, yoga class or other product or service.”
Instant
On March 7, 2011 Living Social launched Instant Deals in Washington DC as a test market for future expansions. Since then, LivingSocial Instant has been expanded to New York City and San Francisco. LivingSocial Instant is a mobile feature that lets consumers find deals within a half-mile radius with the iPhone App.
Escapes
LivingSocial Escapes is a travel site offering savings on curated adventures. Just as LivingSocial lets people discover new services, experiences and attractions at deep discounts in their hometown or places they visit, LivingSocial Escapes will help people find one-of-a-kind day trips, packaged nearcations, quick escapes that don't require air travel, or weekend excursions they might not typically pursue.LivingSocial Escapes Deals last seven days; the margins and the pricing are not the same as the daily deal structure, but discounts (value) are significant. LivingSocial Escapes’s first package, a rock star weekend in Chicago, included a discounted stay at the Hard Rock Hotel, drinks at its bar, 10 downloads from iTunes and a Gibson guitar rental. New packages are announced every Wednesday. Tim O’Shaughnessy, CEO of LivingSocial, said the brand is about offering “really cool things to do at great value” and this new travel experience is consistent with that notion.
Adventures
After LivingSocial's acquisition of UrbanEscapes in October 2010, the company launched LivingSocial Adventures, the division of LivingSocial that "creates and produces full-curated social events."[18] LivingSocial Adventures includes deals like “Zen Escape Yoga Hike” and “Boulder and Brew Tours”.
Families
On January 11, 2011, LivingSocial introduced LivingSocial Families, which is now live in 135 markets worldwide. Family Edition deals offer the same discounts but for family-oriented activities like zoos, museums, day trips, aquariums, art classes, and more. As of Tim O'Shaughnessy, CEO and co-founder of LivingSocial, said "We're excited to bring these family-centric deals to more of our members just in time for summer outings to the local zoo, museum, craft fair or kid-friendly restaurant.
Business model
LivingSocial offers a new deal each day to its members who subscribe via email. After subscribing to one or more of its 240+ markets, users receive a daily e-mail presenting the city’s deal for that day. Members have a chance to save 50-90% on experiences in their area.
Once a deal has been purchased, members are e-mailed their redemption vouchers the following business day, around 7 a.m. local time. In addition, purchasing members have the option to send a link to any or all of their contacts and if three of them purchase the offer the original purchasing member obtains their offer free. Members must either print out their vouchers or download the LivingSocial app on their Android, iPhone, iPad, or iPod to redeem.
For chosen merchants, LivingSocial provides a surge of new customers with no upfront costs for merchants, however LivingSocial takes a cut of the deal revenue.
Funding
The company received $5 million in Series A funding in 2008. In January 2010, LivingSocial raised $5 million in Series B funding from Grotech Ventures and AOL Founder Steve Case. Two months later, on March 11, 2010, the company announced a $25 million round led by U.S. Venture Partners, Grotech and Case. LivingSocial then acquired $14 million Series C round, from Lightspeed Venture Partners with U.S. Venture, Grotech and Case contributing. Most recently, US Venture Partners and Grotech invested an additional $10.23 million of equity offering to the company. Its fundraising for 2010 comes to $50 million. LivingSocial has just scored a $175 million investment from Amazon.com. LivingSocial also received an additional $8 million investment from Lightspeed Venture Partners. In March 2011, less than four months after the $175 million Amazon investment, LivingSocial raised an additional $400 million from prior investors like Amazon and Lightspeed Venture Partners, and several new ones including T. Rowe Price and Institutional Venture Partners. As of early April, LivingSocial is valued at more than $3 billion.
Acquisitions
InfoEther
In March 2011, LivingSocial acquired InfoEther, a leading Ruby/Rails consultancy.InfoEther is one of the leading technology consultancies specializing in the Ruby software development language and its related Web development framework, Ruby on Rails, which is the basis of the technology upon which LivingSocial is based. The firm is also known for its user experience/interface and interaction design expertise critical to how people work with the technology, particularly with the growing popularity of the mobile Web.
Let's Bonus
In January 2011, LivingSocial acquired a majority stake in LetsBonus. The partnership bolsters LivingSocial’s rapid international expansion, making it now live in multiple countries with the addition of Let’s Bonus’ Spain, Italy, Portugal, Argentina and Mexico. Launched in September 2009 in Barcelona, Let’s Bonus helped to pioneer the collective buying movement in Europe and is the leader in the Spanish market.
Jump On It
In November 2010, LivingSocial bought $5 million controlling stake in Australian social shopping site Jump On It.The acquisition makes LivingSocial the biggest social shopping player in Australia.
Urban Escapes
In October 2010, LivingSocial announced acquisition of social adventure company Urban Escapes, which led to the launch of LivingSocial Escapes and LivingSocial Adventures.
GoNabit
In June 2011, Dubai Based GoNabit, the Middle East's home-grown website for daily deals, has been acquired by LivingSocial, in a landmark deal for the region's fledgling digital industry. GoNabit operates in the UAE, Egypt, Lebanon and Jordan, and claims to have saved consumers more than $5m in the past year. Group buying websites typically sign up a range of businesses to offer discounts, and take a percentage of the revenue.
Ensogo
In June 2011, LivingSocial acquired DealKeren, which offers daily deals in Indonesia, and its parent company Ensogo, which offer daily deals in Thailand and the Philippines. Officially launched in June 2010, Ensogo is known as the No. 1 social shopping website in Thailand, Philippines, and Indonesia and currently serves more than 800,000 members. It continues to gain massive popularity and trust among Asian consumers as the market share leader, and Ensogo members have saved more than $25 million USD in the past year. Ensogo is backed by Rebate Networks, a leading international VC specializing in the social commerce space.
TicketMonster
In August 2011, LivingSocial acquired TicketMonster, Inc., the leading social commerce website in South Korea. Founded in 2010, TicketMonster offers daily and instant deals, travel packages, and events to more than 2 million members in Korea and Malaysia.
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