LivingSocial Raises $14M Financing Round

livingsocial.com

Amid a flurry of interest in social buying startups, LivingSocial on Thursday announced the completion of a Series C financing round worth $14 million.

The round was led by Lightspeed Venture Partners, along with participation from U.S. Venture Partners, Grotech Ventures, and Steve Case's Revolution, LLC.

Engaged in an industry-wide land-grab, LivingSocial plans to use the capital to expand into additional markets, bringing its LivingSocial Deals platform to more domestic cities this year.

"We're constantly receiving requests from our users to expand and launch in their markets, and this recent funding round will allow us to do just that," said Tim O'Shaughnessy, co-founder and CEO of LivingSocial.

As such, LivingSocial on Thursday announced the launch of its Deals program in four new markets -- Portland, Orange County, Charlotte and Philadelphia -- bringing the total to 18 cities.

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Headquartered in Washington, D.C., the startup raised $25 million in a Series B round just last month. Since then, social buying leader GroupOn secured $135 million from Russia's Digital Sky Technologies, along with Battery Ventures. (Rumor has it that the round valued GroupOn at about $1.3 billion.)

Like GroupOn and its many copycats, LivingSocial offers deep discounts on local deals on everything from spas and sky diving lessons to hotels and restaurants. Discounts range from 50% to 70% of the normal prices. If enough people buy into the offers, everyone gets the deal.

LivingSocial collects payment and passes it on, minus its fee, to the business. Like GroupOn, what makes the service so compelling is that people have an incentive to get their friends involved to make sure the minimum is hit.

The company is launching "hyperlocal" deals for the Seattle area, which will be designed to provide merchants with ever greater reach.

Founded in 2007, LivingSocial now claims an online community of 85 million people.

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