The rumors are true! Amazon and daily deals site LivingSocial have just officially confirmed their partnership, with the e-tailer investing a whopping $175 million in the latter. This comes at an interesting time for both companies, amidst even more rumors that competitors Google and Groupon will hook up to the tune of $5.3 billion in the coming weeks.
Earlier today, Hitwise drew up some comparison stats on group buying and released data which showed among other things that Groupon commands 79 percent of U.S. visits to the group buying category, whereas No. 2 in the category LivingSocial only commands 8 percent of the market. While that is a formidable gap in marketshare, LivingSocial is on track to bring in $500 million in revenues next year which is a really positive sign.
In addition to the hefty Amazon financing, the company has also received a $8 million in investment from Lightspeed Venture Partners bringing the entire round up to the $183 million mark. Some are saying that this most recent funding has skyrocketed LivingSocial’s valuation to over $1 billion which would mean that Amazon now has something under a 17.5% stake.
Full press release below:
LivingSocial Announces $175 Million Investment by Amazon.com
WASHINGTON, Dec. 2, 2010 /PRNewswire/ — LivingSocial (www.livingsocial.com) has secured a $175 million investment from Amazon (Nasdaq: AMZN). LivingSocial has also secured an additional $8 million investment from Lightspeed Venture Partners. LivingSocial will use this investment to maintain a steady drumbeat of worldwide launches and overall business growth while continuing to serve more than 10 million subscribers across the U.S., Canada, UK, Ireland and Australia in more than 120 locations. Because of LivingSocial’s rapid expansion, the company is currently booking revenues of more than $1 million a day on average and is projected to book well over $500 million in revenue in 2011.
“To be the biggest player in the local commerce space there is no one better to work with than Amazon,” said Tim O’Shaughnessy, CEO of LivingSocial. “As the social shopping space continues to heat up, LivingSocial is committed to staying focused on providing the high level of quality that consumers and merchants have come to expect when working with us.”
As the online source to find amazing experiences at an unbeatable value, LivingSocial lets anyone experience the hottest restaurants, shops, activities and services in their area. The company has dedicated area experts on the ground in every location working directly with business owners, and constantly researching the best in local adventures to bring a savings of 50% to 70% for consumers.
Recently, LivingSocial expanded its business by acquiring adventure company Urban Escapes, and launching three new verticals including LivingSocial Family Edition, Campus Deals and LivingSocial Escapes, a travel site that offers unbeatable savings on curated adventures. In addition, the company continues a regular flow of launches – on average one per day – and has expanded its reach in Australia with a controlling stake in Jump On It, making it live in five countries.
LivingSocial is the online source for people to find handpicked experiences at a great value, inviting anyone to save up to 50% to 70% each day on their favorite restaurants, spas, sporting events, hotels and other local attractions in major cities. LivingSocial has an extensive subscriber base of 10 million, and is headquartered in Washington, D.C. To sign up for Deals in your location, or to find out more information about LivingSocial, visit http://www.livingsocial.com. You can also follow LivingSocial on Twitter at http://www.twitter.com/livingsocial.
Amazon.com, Inc. (Nasdaq: AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth’s Biggest Selection. Amazon.com, Inc. seeks to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as Books; Movies, Music & Games; Digital Downloads; Electronics & Computers; Home & Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health & Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web Services provides Amazon’s developer customers with access to in-the-cloud infrastructure services based on Amazon’s own back-end technology platform, which developers can use to enable virtually any type of business. Kindle and Kindle DX are the revolutionary portable readers that wirelessly download books, magazines, newspapers, blogs and personal documents to a crisp, high-resolution electronic ink display that looks and reads like real paper. Kindle and Kindle DX utilize the same 3G wireless technology as advanced cell phones, so users never need to hunt for a Wi-Fi hotspot. Readers who don’t need the convenience of free 3G wireless can choose Kindle Wi-Fi for a lower price. Kindle is the #1 bestselling product across the millions of items sold on Amazon.
Amazon and its affiliates operate websites, including http://www.amazon.com, http://www.amazon.co.uk, http://www.amazon.de, http://www.amazon.co.jp, http://www.amazon.fr, http://www.amazon.ca, http://www.amazon.cn, and http://www.amazon.it. As used herein, “Amazon.com,” “we,” “our” and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.
This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results may differ significantly from management’s expectations. These forward-looking statements involve risks and uncertainties that include, among others, risks related to competition, management of growth, new products, services and technologies, potential fluctuations in operating results, international expansion, outcomes of legal proceedings and claims, fulfillment center optimization, seasonality, commercial agreements, acquisitions and strategic transactions, foreign exchange rates, system interruption, inventory, government regulation and taxation, payments and fraud. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent filings.