The downsizing of LivingSocial’s international operations continues: the daily deals site has sold Let’s Bonus — and its operations in Spain, Portugal, Italy and Chile. The buyers are the company’s CEO and CFO, Juan Luis Rico and Joan Pina, as detailed by an internal memo sent out to staff today from Jim Bramson, LivingSocial’s head of corporate affairs and international.
This is a milestone for LivingSocial: Let’s Bonus was LivingSocial’s last remaining non-English language business. It also never migrated to the common LivingSocial platform. LivingSocial’s business is now focused only on English-language sites in the United States, Canada, Australia, New Zealand, United Kingdom and Ireland.
Earlier, we’d received a draft memo that noted the buyer is a Spanish investor group led by Antonio Alcantara, the founder and head of Ofertix, a private buying club and e-commerce portal in Spain. It is not clear in the official statement if this investment group is actually involved — we are asking. LivingSocial says that there is no involvement from any outside groups.
“While there was outside interest in acquiring the business, the management buyout of Let’s Bonus was the best possible result for the team,” a spokesperson for LivingSocial says. She confirms also that Oftertix did not directly acquire the company: “There is no involvement with Ofterix or its founder. The Let’s Bonus CEO and CFO are not working with any outside group.”
Some background on the deal: LivingSocial acquired Let’s Bonus in 2011, also for an undisclosed sum (and you should click on that link if only to marvel at Robin’s opening sentence). It was part of the company’s aggressive international expansion that saw it acquiring several other companies, following a route not unlike that of its rival Groupon.
That inorganic growth turned out to be a problematic playbook: in cases where the businesses never migrated to a common platform, it was impossible to properly account for how each was doing, let alone efficiently roll out new services that could have helped each of them as the basic daily deals model grew stale and less appealing to consumers. And given that the company has now sold off all of its non-English businesses, it seems that it never managed to overcome the language and cultural barriers very well, either.
The “decline of the daily deal” has been a problem in LivingSocial’s home market as much as abroad. The company, which is 30% owned by Amazon, saw revenues decline by 23% last year. LivingSocial has raised nearly $1 billion in funding. Its last round of $110 million in 2013 was at a valuation of $1.5 billion.
The company is working to turn things around, though. It hired a new CEO last year, eBay alum Gautam Thakar, to replace co-founder Tim O’Shaughnessy at the helm. Thakar (who says he has never actually met Amazon’s Jeff Bezos but appreciates Amazon’s long-term support of his company… okay) is trying to focus the company’s business as consumers’ interest in the company’s daily deals model continues to wane. He is partly doing that by repositioning the business as an “experiences marketplace“; and partly by cutting costs and selling off assets like Let’s Bonus.
But this is not the first international sell-off for LivingSocial. The most notable one was in 2013, when the company sold its South Korean business Ticket Monster to Groupon for $260 million in cash and stock (LivingSocial initially bought the company for $350 million). Groupon, ironically, is now looking to sell a majority stake in that operation.
Below are the various memos I have received. First, the one sent out to employees, sent by a source in Spanish; second, the version LivingSocial has provided to me in English; third, the memo we got last night claiming a different sales outcome (but still accurately pegging the sale).
———- Mensaje reenviado ———-
De: Jim Bramson <jim.bramson@livingsocial.com>
Fecha: 12 de febrero de 2015, 11:05
Asunto: Today’s news
Para: Jim Bramson <jim.bramson@livingsocial.com>Hola a todos,
Queremos anunciar la venta de LetsBonus a los directores generales, Juan Luis Rico y Joan Pina.
Como sabéis, Juan Luis y Joan han dirigido la compañía y han sido una parte importante del equipo de dirección internacional de LivingSocial durante varios años. Queremos agradecerles su papel en la construcción de la marca LetsBonus.
Su experiencia en la gestión de la organización, junto con su profundo conocimiento del negocio, les ha sitúan en una excelente posición para dirigir la familia LetsBonus en esta nueva etapa de vuelta a sus raíces locales.
LetsBonus tiene muchos activos – una marca bien posicionada, un equipo con talento y recursos financieros suficientes – que contribuirán a impulsar el plan que vuestro equipo directivo pondrá en marcha para hacer frente a los retos actuales.
Aunque LetsBonus ha sido una parte importante del grupo LivingSocial, ésta ha sido una decisión acertada tanto para LetsBonus como para LivingSocial. Las operaciones globales de LivingSocial se consolidan ahora en una única plataforma y una única marca, como parte de los esfuerzos continuados de optimización del negocio a nivel global y de la posición de LivingSocial de cara al crecimiento futuro.
Para el equipo de LetsBonus, la venta permite a vuestra dirección general, ahora propietarios, potenciar el negocio e invertir en el mercado con una toma de decisiones a nivel local, con mayor flexibilidad y control sobre las decisiones. En este sentido, estamos encantados de dejar LetsBonus en manos del equipo directivo que ha contribuido a situar la empresa donde está ahora.
Os deseamos todos los mejores éxitos en esta nueva etapa.
Para poder atender a las preguntas que seguro tendréis, a las 12 tendremos un all hands donde Juan Luis, Joan y yo os atenderemos personalmente.
Un abrazo,
Jim
LivingSocial colleagues,
Today we are announcing the sale of Let’s Bonus to its general managers, Juan Luis Rico and Joan Pina.
Juan Luis and Joan have led the group for the past year and have been an integral part of LivingSocial’s international management team for several years. We want to thank them for their role in building the Let’s Bonus brand.
Their experience in managing the organization, coupled with their deep knowledge of the local marketplace, put them in a strong position to lead the Let’s Bonus family as it returns to its local roots.
While Let’s Bonus has been a valuable part of the LivingSocial portfolio, this was the right decision for both LivingSocial and the local business. LivingSocial’s global operations are now consolidated to a single platform and a single brand, as part ofcontinued efforts to streamline the global business and position LivingSocial for future growth.
For the Let’s Bonus team, the sale allows the local management, now owners, to further the business and invest in the market with local decision making, flexibility and control. In that context we are delighted to have this next phase for Let’s Bonus be led by the management team who have helped to get the company to where it is today.
We wish our colleagues and friends at Let’s Bonus every future success.
Jim
And the draft…
DRAFT: email to Let’s Bonus employees
This may need a more sensitive intro depending on convos w/ LB teamToday we are announcing the sale of Let’s Bonus to an investor group led by AntonioAlcántara, the founder of Ofertix, a leading Spanish ecommerce company.
We are delighted to have found a buyer who has demonstrated expertise in retail and ecommerce to compliment the local experience that Let’s Bonus is known for. This combination will significantly benefit the entire business and its ability to serve both consumers and merchant partners. Juan Luis Rico and Joan Pina will be working closely with Antonio to ensure a smooth transition of the business.
We want to thank you for all of your help and hard work in building the strong Let’s Bonus brand. In particular, we want to thank Juan Luis and Joan for their leadership of the organization this past year. We all want to see continued growth and success for the business and the team. As there will be many questions about the days and weeks ahead we will be having an all hands meeting later today at which Antonio will be able to address the team personally.
Updated throughout with further information