LivingSocial Aims to Be Different from Groupon

The daily deal industry pioneered by Groupon has spawned more than 700 copycat businesses, attracted billions in venture capital, and changed the way millions of shoppers find bargains. And still, things aren’t going so great. Pundits have endlessly criticized the financials of Groupon, which released its numbers to the public in June in preparation for an initial public offering that could be delayed. In August, Facebook shuttered its deals service, joining the 170 daily deals sites that have closed or been sold this year, according to researcher Yipit. “Daily deals have become a commodity product,” Jeremy Stoppelman, chief executive officer of review site Yelp, said earlier this month after scaling back his company’s offers.

That leaves LivingSocial, the second-largest deals site, with the dual challenges of navigating these choppy waters while keeping pace with its much larger rival. To do so, Tim O’Shaughnessy, the 29-year-old CEO of the Washington (D.C.)-based company, is beginning to plot his own course. Like Groupon, LivingSocial began talking to bankers earlier this year to prepare for an IPO. But according to people familiar with the talks, the company is leaning toward raising more than $200 million of private funds in a round that may value it at close to $6 billion, and keep it out of the harsh spotlight of the public markets. O’Shaughnessy declined to comment on the plans. He’s also debuting new twists on the deep-discount model that could help save the company from the sudden stigma attached to the term “daily deal.”