Arab Today, arab today livingsocial receives 110 million cash infusion
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LivingSocial receives $110 million cash infusion

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Arab Today, arab today LivingSocial receives $110 million cash infusion

Washington - Arabstoday

District-based daily-deal company LivingSocial has received a much-needed $110 million cash infusion from its investors, according to a memo the company sent to employees Wednesday. “This investment is a tremendous vote of confidence in our business from the people who know us best, our current board members and investors,” LivingSocial chief executive Tim O’Shaughnessy said in the memo, which was obtained by The Washington Post. They “have reviewed our plans for 2013, and they are enthusiastic enough to want to commit additional financial resources through this round.”The cash infusion could not come at a better time. Living­Social has accumulated more than $1 billion in losses since 2011, and it laid off more than 500 employees last year. It wrote off the value of several international acquisitions in 2012, recording a $579 million impairment charge, and began shifting its focus beyond coupons. “We have an aggressive roadmap for profitability and expansion this year,” the memo said. “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.” The memorandum did not specify which investors contributed the $110 million. LivingSocial has previously received funding from Steve Case’s Revolution; Tysons Corner-based venture capital firm Grotech Ventures; a digital venture arm of J.P. Morgan; and Amazon.com, which owns 29 percent of LivingSocial. A spokesman for LivingSocial declined to comment. LivingSocial has struggled to regain its footing in the turbulent daily-deals market. Hundreds of companies have crowded into the sector over the past 18 months, but many are now falling by the wayside. Even Groupon, the industry leader, has struggled to gain Wall Street support after a problematic initial public offering in late 2011. Groupon and LivingSocial are trying to find new sources of revenue, including selling products — such as consumer electronics — directly to consumers. LivingSocial has expanded, with mixed results, into offering live experiences such as balloon rides and beer fests. Its 918 F Street facility in downtown Washington hosts cocktail events and live bands. “The opportunities for small-business promotions are greater than ever,” said Peter Krasilovsky, who follows the deal industry at BIA/Kelsey in Chantilly. “The question is who is best positioned to provide services such as sales, technology and pricing to small businesses. These are the issues that LivingSocial has to contend with.” In the memo, O’Shaughnessy said the new investment “does not change our plans to reach profitability, and we believe that a cash-flow positive and growing company will give us even deeper resources to take advantage of new opportunities, extend our promising lines of business, and expand a robust funnel of new customers.”  Washington Post

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