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Business model

LivingSocial offers a new deal each day to its members who subscribe via email. Once a deal has been purchased, members are e-mailed their redemption vouchers the following business day, around 5 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.

LivingSocial also provides new customer leads at no upfront cost to merchants, however LivingSocial takes a cut of the deal revenue. Merchants can also control what the offer involves and may choose to cap purchases, as not to overwhelm their business.

Daily Deals

Daily Deals are experiences that may be shared with friends. “Consumers find hometown deals they like on the sites, sign up, persuade others to do so, then get a cut-rate dinner, haircut, yoga class or other product or service.”


On March 7, 2011 Living Social launched Instant Deals in Washington DC as a test market for future expansions. Since then, LivingSocial Instant has been expanded to San Francisco, New York City, Seattle, Chicago, Portland, Los Angeles, Minneapolis and London. LivingSocial Instant is a mobile feature that lets consumers find deals within a half-mile radius with an iPhone
The iPhone is a line of Internet and multimedia-enabled smartphones marketed by Apple Inc. The first iPhone was unveiled by Steve Jobs, then CEO of Apple, on January 9, 2007, and released on June 29, 2007...



LivingSocial Escapes is a site offering discounts on travel. LivingSocial Escapes Deals last seven days; the margins and the pricing are not the same as the daily deal structure, but discounts (value) are significant. LivingSocial Escapes’s first package, a rock star weekend in Chicago, included a discounted stay at the Hard Rock Hotel, drinks at its bar, 10 downloads from iTunes and a Gibson guitar rental. New packages are announced every Wednesday. Tim O’Shaughnessy, CEO of LivingSocial, said the brand is about offering “really cool things to do at great value” and this new travel experience is consistent with that notion.


After LivingSocial's acquisition of UrbanEscapes in October 2010, the company launched LivingSocial Adventures. LivingSocial Adventures includes deals like “Zen Escape Yoga Hike” and “Boulder and Brew Tours”.


On January 11, 2011, LivingSocial introduced LivingSocial Families. Family Edition deals offer the same discounts but for family-oriented activities like zoos, museums, day trips, aquariums, art classes, and more.


LivingSocial was founded as Hungry Machine in 2007 by four employees from Revolution Health Group
Revolution Health Group
Revolution Health Group is a United States-based corporation founded in July 2005 by Steve Case, who previously co-founded America Online. Revolution Health’s stated mission is to change healthcare by giving people the tools, information and support to manage their health and wellness...

. The company's first major application was 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.


The company received $5 million in Series A funding in 2008. In January 2010, LivingSocial raised $5 million in Series B funding from Grotech Ventures and AOL Founder Steve Case. Two months later, on March 11, 2010, the company announced a $25 million round led by U.S. Venture Partners, Grotech and Case. LivingSocial then acquired $14 million Series C round, from Lightspeed Venture Partners with U.S. Venture, Grotech and Case contributing. Most recently, US Venture Partners and Grotech invested an additional $10.23 million of equity offering to the company. Its fundraising for 2010 comes to $50 million. LivingSocial has just scored a $175 million investment from Amazon.com. LivingSocial also received an additional $8 million investment from Lightspeed Venture Partners. In March 2011, less than four months after the $175 million Amazon investment, LivingSocial raised an additional $400 million from prior investors like Amazon and Lightspeed Venture Partners, and several new ones including T. Rowe Price and Institutional Venture Partners. As of early April, LivingSocial is valued at more than $3 billion.

In 2011, LivingSocial completed a $400 million round of funding valuing LivingSocial at $3 billion. According to TechCrunch, 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.


  • In March 2011, LivingSocial acquired InfoEther, a Ruby/Rails
    Ruby on Rails
    Ruby on Rails, often shortened to Rails or RoR, is an open source web application framework for the Ruby programming language.-History:...

     consultancy. Ruby on Rails is the platform upon which LivingSocial runs.
  • In January 2011, LivingSocial acquired a majority stake in LetsBonus, which now operates in Spain, Italy, Portugal, Argentina, Uruguay, Chile, Colombia and Mexico. Launched in September 2009 in Barcelona, Let’s Bonus was an early operator of a collective buying service in Europe, particularly in the Spanish market.
  • In November 2010, LivingSocial bought $5 million controlling stake in Australian social shopping site Jump On It. The acquisition makes LivingSocial the biggest social shopping player in Australia.
  • In October 2010, LivingSocial announced acquisition of social adventure company Urban Escapes, which led to the launch of LivingSocial Escapes and LivingSocial Adventures.
  • In June 2011, Dubai Based GoNabit, a Middle Eastern website for daily deals, was acquired by LivingSocial. GoNabit operates in the UAE, Egypt, Lebanon and Jordan, and claims to have saved consumers more than $5m in 2010-2011. Group buying websites typically sign up a range of businesses to offer discounts, and take a percentage of the revenue.
  • In June 2011, LivingSocial acquired DealKeren, which offers daily deals in Indonesia, and its parent company Ensogo, which offer daily deals in Thailand and the Philippines. Officially launched in June 2010, Ensogo currently has more than 800,000 members. Ensogo claims that its members have saved more than $25 million USD in 2010-2011. Ensogo is backed by Rebate Networks, an international venture capital
    Venture capital
    Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...

    group specializing in social commerce.
  • In August 2011, LivingSocial acquired TicketMonster, Inc., a social commerce website in South Korea. Founded in 2010, TicketMonster offers daily and instant deals, travel packages, and events to members in Korea and Malaysia.