Earlier this month, LivingSocial, the second-largest discounted deals operator, was in talks with investment banks for an initial public offering. Now, it has been confirmed that they have hired JPMorgan Chase, Deutsche Bank and Bank of America Merrill Lynch to oversee its upcoming initial public offering.
LivingSocial managers have discussed in meetings with the bankers the possibility of raising $700 million to $1 billion in the stock sale, giving the company a value of $10 billion to $15 billion, according to a New York Times report.
The move makes LivingSocial the latest of a new crop of fast-growing Internet companies to test stock market appetite for Web offerings. Social-networking site LinkedIn Corp., Internet radio company Pandora Media Inc. and online vacation-rental site HomeAway Inc. recently went public amid much hype. Groupon and online videogame maker Zynga Inc. also have filed for IPOs.
But LivingSocial’s selection of investment bankers shows that the online daily-deals industry, which barely existed three years ago, is particularly trying to capitalize on the sector’s torrid growth.
LivingSocial launched in 2009, is led by founder and Chief Executive Tim O’Shaughnessy. The company quickly expanded from its hometown of Washington,D.C., to other major American cities.
The site’s market share is growing. LivingSocial’s share in the nation’s top 30 metro markets rose from 20% in April to 24% in May, according to daily deal-site aggregator Yipit.
LivingSocial competitor, Groupon Inc., is facing a copycat problem in Boston, where the number of active daily-deals sites have increased over the past 2 years.
The company is not worried about this ‘competition’. They are rather moving forward, than fretting over plagiarism, launching Groupon Now inNew York and San Francisco, following its debut in Chicago last month.
LivingSocial, being the second largest after Groupon, is aware of the increasing imitation in this sector, which serves as a factor to strengthening their position in the market. Acquisitions have been underway, and strong international presence would lay off competition.
Middle East presence
LivingSocial made their first foray in the Middle East region last month, after the acquisition of GoNabit.com, the Middle East’s original group-buying website.
“As with previous acquisitions, LivingSocial has again chosen to align with a local company that possesses similar values and ways of doing business. We are excited to enter the dynamic Middle East market and further strengthen our strategic global efforts to bring LivingSocial values to members across the globe,” said Tim O’Shaughnessy, CEO and co-founder, LivingSocial.
GoNabit was co-founded by Dan Stuart and Sohrab Jahanbani in January 2010, with investment and support from Bayt.com, the Middle East’s leading job site.
LivingSocial also announced its launch in The Netherlands; the acquisition of Ensogo, a leading daily deal website in the Philippines and Thailand; and Deal Keren, an Ensogo company based in Indonesia. Along with the GoNabit deal, these two new acquisitions and the Netherlands launch bring the total number of countries in which LivingSocial operates to 21. The company’s reach now spans six of the seven continents.
Sources: ibtimes, wsj, wantchinatimes, illumemag