LivingSocial Is Said to Discuss $1 Billion Initial Share Sale With Bankers
LivingSocial, the second-largest website devoted to daily coupons, is selecting investment banks for an initial public offering that may value the company at $10 billion to $15 billion, according to a person with direct knowledge of the talks.
The Washington, D.C.-based company is seeking to raise about $1 billion in an IPO and has had conversations with Barclays Plc (BARC), JPMorgan Chase & Co. (JPM) and Allen & Co. to lead the offering, said the person, who asked not to be named because the discussions are private. LivingSocial also has talked with additional banks for the IPO, which may happen by the end of the year, the person said.
LivingSocial would follow Internet companies LinkedIn Corp., Yandex NV and Renren Inc. in raising money from public markets, as well as larger rival Groupon Inc., which filed for a $750 million IPO June 2. LinkedIn, the biggest professional- networking site, was the first major U.S. social-media company to sell shares in an IPO. Its stock more than doubled in the first day of trading last month.
CNBC reported yesterday that LivingSocial was in talks with banks for an IPO, without naming them. Maire Griffin, a spokeswoman for LivingSocial, and Brandon Ashcraft, a spokesman for Barclays Capital, declined to comment. Howard Opinsky, a spokesman for JPMorgan, didn’t immediately respond to a request for comment. A call to Allen’s New York office outside normal business hours wasn’t answered.
LivingSocial, led by co-founder Tim O’Shaughnessy, raised $400 million in April, valuing the company at $3.5 billion, two people said at the time. The company will generate $1 billion in revenue in 2011, they said.
The company is tripling its workforce to 1,800 this year and plans to more than double the cities where it offers deals to 300, O’Shaughnessy said in an interview in December. Groupon has more than 7,000 employees and sells coupons in more than 500 cities.
LivingSocial claims 24 percent of online daily deal revenue in top North American markets, according to a study released yesterday by Yipit. It gained 4 percentage points in May from a month earlier, while Groupon lost 4 points, dropping to 48 percent.
The companies deliver daily discounts on restaurants, hotels, events, and other goods and services. The daily-deal market may generate $3.9 billion in U.S. sales in 2015, compared with $873 million in 2010, according to research firm BIA/Kelsey in Chantilly, Virginia.
Investors in LivingSocial include Twitter Inc. backer Institutional Venture Partners, as well as T. Rowe Price Group Inc., Lightspeed Venture Partners, Revolution LLC, Grotech Ventures and U.S. Venture Partners. In December, Amazon.com Inc. (AMZN) invested $175 million in the company.
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