StartupStats got wind of news this afternoon that LivingSocial Co-founder Eddie Frederick is stepping down from both his leadership position today, and from his role as a member of the company’s board of directors. We’ve since been able to confirm the news by way of LivingSocial Director of Communications Brendan Lewis.
Frederick co-founded the daily deal giant back in 2007 with CEO Tim O’Shaughnessy, CIO Val Aleksenko, and CTO Aaron Batalion. The four met while working for Revolution Health, and, after completing work on the consumer healthcare portal, they decided to leave to pursue their already-launched Facebook app, Virtual Bookshelf. The book solution, formerly known as Hungry Machine, was initially the company’s flagship product, before it became the Groupon competitor we know today.
Frederick spent the following year developing Facebook apps, among them Pick Your Five, which let users pick things they liked and write about them on their online profiles. In the beginning, LivingSocial fancied itself more of a general interest online social network, and it first started to really gain traction when Pick Your Five exploded (going from 0 to 35 million users in about three weeks). The following year, the company acquired Buy Your Friend A Drink, a company specializing in sending users to local bars to redeem drink vouchers, which eventually gave rise to LivingSocial Deals.
From then until November 2011, Fredericks served as President of LivingSocial (at which point the company underwent a big shuffling of leadership titles) and on the company’s board of directors — and today he’s relinquishing both roles. It is not clear as of now what Frederick will be doing next, or whether or not he will be selling his stake in the company — or whether or not this has anything to do with with LivingSocial’s reported IPO. But we have heard from sources close to the company that this was an “amiable departure.”
The company’s spokesmen declined to comment about the IPO rumors, but, the company raised a sizable $176 million series F round in December (with the total offering amount being $400 million), bringing its current total investment to $808 million. At the time, Erick speculated that this new infusion of private capital (at a reported $6 billion valuation), would potentially allow it to avoid those IPO fees and continue to grow organically, focusing on talent and strategic acquisitions, among other things.
The company has certainly been focusing on the latter, as an updated filing with the SEC from Amazon — which owns a 31 percent stake in LivingSocial — revealed that the company sustained $558 million in losses in 2011, emanating largely from acquisitions, stock compensations, and marketing costs. While this was an expected result of the daily deal site’s fast-paced growth cycle, it still took many by surprise.
LivingSocial also announced today that LivingSocial Instant, its product designed to allow restaurants to offer flash discounts to customers during hours of slow traffic, would be shutting down. Instant is to be replaced by a food-ordering service called “Takeout & Delivery.”
As to the news of Fredericks stepping down, Nick O’Neill of StartupStats was able to obtain the email from LivingSocial CEO Tim O’Shaughnessy, which announced the co-founder’s departure. An excerpt is below, and you can find the full email here.
A big reason for the success and vision of LivingSocial has been the leadership and passion of one of our founders. Eddie has seen it all at LivingSocial – his work has ranged from leading our user acquisition efforts to A/B testing button colors for Facebook Apps to pushing to launch Me + 3 and countless other contributions. Importantly, he’s also been a partner and driving force in always pushing us into new business opportunities and scaling existing businesses even further. His “negative space” view has provided a unique voice as we’ve grown. On every decision, Eddie framed it with a binary question: Does this help us win? And he usually helped us get the right answer.
We’ve reached out to Eddie and others, who as of now, could not be reached for comment, but we’ll update when we learn more.
Image credit: Thais Luporini of SocialCash
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