The round was led by Lightspeed Venture Partners, joined by all existing investors.
It is highly unusual for a startup to raise money at a new valuation this soon. Two things that go some way toward explaining it:
- The local buying space is going absolutely crazy right now. Industry leader Groupon just raised $135 million at an eye-popping $1.35 billion valuation. There are dozens of clones, many of them venture-backed. Groupon is in a league of its own, but LivingSocial is generally thought to be the second biggest player by a comfortable margin.
- LivingSocial is expanding aggressively. Along with the funding, LivingSocial announced that it is live in four new markets as of this morning, bringing the total to 18. The business depends on having feet on the ground in each market negotiating deals, so the company’s payroll is ballooning. LivingSocial has tripled its headcount to over a hundred employees since the beginning of the year, and cofounder and CEO Tim O’Shaughnessy says he expects that rate to increase in the months ahead.
LivingSocial also announced that it will begin targeting “hyperlocal” markets starting in Seattle, where users will be able to find deals based on their neighbourhood rather than simply their city.
None of this quite explains the rapid succession of funding rounds, but you can count on a lot more money flowing into this industry.
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