"This investment is a tremendous vote of confidence in our business people who know us best, our current board members and investors," he said in a memo seen by CNET. "They have reviewed our plans for 2013, and they are pretty excited wanting to commit additional financial resources through the turn."
Funding followed a "competitive process" in which the company has several financing options, O'Shaughnessy said.
It is a time to rock everyday business processes. Groupon, LivingSocial biggest rival, was considered one of the best starts in its IPO in 2011. However, he quickly fell out of favor as the company continued to report losses and slowing revenue. Its action has plummeted from its IPO price of $ 20, but rebounded somewhat in recent weeks, trading today at $ 5.70, down 3.8 percent, but still up 22 percent in the year to date.Privately held LivingSocial, meanwhile, has faced similar troubles. He tried to diversify into other markets - such as the supply of goods and coupons - to compensate for its financial difficulties, but it is unclear to what extent these efforts are ongoing. The company laid off nearly 10 percent of its staff at the end of last year.
Amazon, which held a 29 percent LivingSocial at the end of 2012, revealed in a regulatory filing last month that LivingSocial revenues in 2012 more than doubled to $ 536 million, but its net loss widened to $ 650 million $ 499 million in 2011.
We contacted Amazon about fundraising LivingSocial announced today and will update the report when we hear back.
O'Shaughnessy said in his note that the new investment does not change LivingSocial has plans to achieve profitability, but gives the company "deep resources to take advantage of new opportunities to expand our business lines Promising, and develop a robust funnel new customers. '
The CEO told employees in the past that he hopes the company will be profitable at some point this spring, but he was always posting big losses in recent times, as evidenced by the recent report Amazon.
The Internet giant also said current assets of LivingSocial (most species) slipped to $ 76 million at the end of 2012 of $ 176 million at the end of 2011.
According to the Wall Street Journal, LivingSocial has spent some $ 600 million of cash investors in recent years, with a recent series raised at a valuation of $ 4.5 billion. By comparison, Groupon is now worth $ 3.9 billion, according to Google Finance.
A person familiar with the most recent transaction LivingSocial told CNET that the financing round was structured so that there is no way to determine an implied valuation. It was not simply an issue of shares, the person said.
Anyway, money is sure to win LivingSocial time to recover.
"This round of financing will allow us to devote the resources we need, while building a significant cash reserve against unforeseen events or bumps in the road," said O'Shaughnessy.
Here is the full memo from O'Shaughnessy:
LivingSocialites -
We have good news to report today, as many of our existing investors have increased their support to the business through a new round of funding that will give us an additional $ 110 million to build our reserves, strengthen our long-term plans and achieve our vision.
This investment is a tremendous vote of confidence in our business people who know us best, our current board members and investors. They have reviewed our plans for 2013, and they are pretty excited wanting to commit additional financial resources through the turn. This cycle also follows a competitive process in which we have been fortunate to have several financing options.
As you know from our all-hands last month, we have a roadmap to profitability and aggressive expansion this year, and plans include increasing investment in areas such as marketing, technologies and mobile devices. This round of financing will allow us to devote the resources we need, while building a significant cash reserve against unforeseen events or bumps in the road.
This new investment will not change our plans to achieve profitability, and we believe that a company cash flow positive and growing will give us even more resources to take advantage of new opportunities to expand our business lines Promising and develop a robust funnel new customers. We will share regular updates on the progress and results against objectives as we move forward.
We had a strong start to the year, and I am delighted to have the opportunity to strengthen our path to success over the next two months. Thank you again for your hard work and dedication.
