LivingSocial Gets a Much-Needed $110 Million Boost
Wall Street Journal
February 20, 2013, 11:57 AM
LivingSocial Inc. recently raised $110 million from existing investors, giving its coffers a much needed boost after the daily-deals company’s 2012 losses widened by 30% last year.
Chief Executive Tim O'Shaughnessy announced the investment in a memo to employees Wednesday. “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,” he said in the memo.
Despite more than doubling revenue last year to $536 million, the Washington, D.C., company posted a $650 million net loss for the year, compared with a loss of $499 million a year earlier, according to a filing last month from LivingSocial investor Amazon.com Inc. AMZN -1.24%
Amazon said then it valued its 29% LivingSocial stake at $52 million, suggesting LivingSocial’s a book value was $179 million. As recently as September, Amazon said LivingSocial’s book value was $324 million, and nearly $1 billion in June.
The 2012 loss was due in part to an impairment charge of $579 million, attributable to the declining value of some of LivingSocial’s overseas investments.
LivingSocial’s bigger rival, Groupon, hasn’t exactly fared much better in the past year amid concerns that consumers are tiring of daily discounted offers. Groupon’s shares hit a new low in November after the company reported a loss for the third quarter amid slowing revenue growth. Its shares have fallen about 78% since its November 2011 IPO.
blogs.wsj.com |
