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Amazon <3 Living Social December 2, 2010

Posted by jeremyliew in amazon, living social.
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As announced today, Amazon is investing $175M into Living Social. This investment will fuel the company’s growth on three dimensions:

  • International. Living Social recently bought a controlling stake in JumpOnIt, a local deals site in Australia, and have launched owned and operated sites in the UK and Canada. They’re actively looking at expansion into other geographies.
  • Lifestyle focused deals. The company recently launched Living Social Family Edition and Campus Deals to target deals to the lifestyles of particular demographics.
  • Vertically focused deals. Living Social recently launched a “near-cation” service called Living Social Escapes, focused on getaway travel. Their acquisition of Urban Escape is helping them create these amazing adventure experiences.

At Lightspeed, we continue to be incredibly excited about the growth prospects for the company, and increased our investment into the company, putting in an additional $8M. I posted earlier this year on why Lightspeed invested in Living Social, and our enthusiasm continues unabated to this day.

Local deals is a category whose growth has been extraordinary. This space didn’t exist two years ago and now is generated over $100M a month in revenue. Although there are many new entrants, and more each week, the two leaders, Living Social and Groupon, control more than 90% of the market share in the “local deals” space.  Furthermore, the share of the two leaders is increasing over time. This has rapidly become a scale players game. It is no wonder that Google is rumored to want to buy Groupon. As Living Social CFO John Bax said earlier, $6Bn could be cheap. There are only two companies at internet scale in the local deals space right now, and the major internet companies are all thinking about what their response to this category’s growth should be. Amazon has always been forward thinking and we’re excited to have them join the board and the investor base.

Comments»

1. Senith @ MBA tutor - December 2, 2010

Congrats to the Living Social and LSVP team!

2. Senith @ MBA tutor - December 2, 2010

Jeremy,

Its prob. confidential. No word on the valuation or stake Amazon got in return for $175 million. Can you shed some light on that?

Senith

jeremyliew - December 2, 2010

Amazon is a minority investor in Living Social

3. Nick - December 4, 2010

Any word on whether LivingSocial is planning to invest some of that into CPA ad networks, like what happened earlier this year on Neverblue etc.?

As an affiliate I have to ask :D

4. Jonathan - December 5, 2010

Jeremy, not sure if you will be aware but your old posts “Three ways to build an e-commerce business to $500m in revenues March 16, 2007″ still receives comments, pretty good after 3 years :)

jeremyliew - December 5, 2010

Thanks! Yes, I’m quite pleased about that!

5. Big day for Living Social – $10 for a $20 Amazon gift certificate « Lightspeed Venture Partners Blog - January 19, 2011

[...] January 19, 2011 Posted by jeremyliew in amazon, living social. trackback Last year, Amazon invested $175M into Living Social, one of our portfolio companies. Today we’re seeing the first step of operational integration [...]

6. Big day for Living Social – $10 for a $20 Amazon gift certificate | Daringminds.com - January 19, 2011

[...] year, Amazon invested $175M into Living Social, one of our portfolio companies. Today we’re seeing the first step of operational integration [...]


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