LivingSocial

LivingSocial is a deal-of-the-day company headquartered in Washington, D.C. It is the fastest growing company in the e-commerce space and specializes in localized daily deals across more than 550 markets in 21 countries. The company released its first daily deal on July 27, 2009, for the restaurant Zengo in DC’s Chinatown, and since that point has grown to over 40 million members.
LivingSocial was founded as Hungry Machine in 2007 by four employees from Revolution Health. The company first gained notoriety for their Visual Bookshelf application on Facebook which allowed users to catalog and share their favorite books with friends. Later, the company released PickYourFive and other Polls applications, making LivingSocial the number one application developer on Facebook as measured by page views. After acquiring BuyYourFriendADrink.com in 2009, LivingSocial launched a daily deals business, which since has become its highest grossing venture to date.
Most recently, LivingSocial completed a $400 million round of funding. Investors said the latest round values LivingSocial at $3 billion. The company is currently booking $1 million a day and is projected to book in excess of $500 million in revenue in 2011 and nearly double its market presence.
LivingSocial offers a new deal each day to its members who subscribe via email. After subscribing to one or more of its 240+ markets, users receive a daily e-mail presenting the city’s deal for that day. Members have a chance to save 50-90% on experiences in their area.
Once a deal has been purchased, members are e-mailed their redemption vouchers the following business day, around 7 a.m. local time. In addition, purchasing members have the option to send a link to any or all of their contacts and if three of them purchase the offer the original purchasing member obtains their offer free. Members must either print out their vouchers or download the LivingSocial app on their Android, iPhone, iPad, or iPod to redeem.
For chosen merchants, LivingSocial provides a surge of new customers with no upfront costs for merchants, however LivingSocial takes a cut of the deal revenue. LivingSocial’s goal is to help local merchants spend their marketing dollars more efficiently and at the same time help local consumers figure out where to spend their money. Merchants can also control what the offer involves and may choose to cap purchases, as not to overwhelm their business.