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Think the group-coupon craze is nearing the end of its life cycle? Tell that to LivingSocial’s investors, who just sunk another $110 million into the online deals service.
The funding news comes from an email that was first obtained by the Washington Business Journal today, which indicates that the new round came from existing investors and was one of many options the startup had for getting additional funding.
The new round will “build our reserves, solidify our long-term plans and execute against our vision for the future,” wrote LivingSocial CEO Tim O’Shaughnessy in the message. “This investment is a tremendous vote of confidence in our business from the people who know us best, our current board members and investors.”
The new round is a bit surprising considering that the consumer demand for online-coupon services has somewhat dropped off in the last several months, not to mention the dismal earnings reported by rival coupon service Groupon. Additionally, LivingSocial saw a $650 million loss in 2012, and a $558 million loss in 2011. Back in November the company axed 10 percent of its workforce in an effort to address the slowed growth of its business.
LivingSocial declined to comment about the new funding.
VentureBeat obtained a copy of the full email message sent out today, which we’ve pasted below:
We’ve got some great news to announce today, as many of our current investors have reinforced their support for the company through a new round of financing that will give us an additional $110 million to build our reserves, solidify our long-term plans, and execute against our vision for the future.
This investment is a tremendous vote of confidence in our business from the people who know us best, our current board members and investors. They have reviewed our plans for 2013, and they are enthusiastic enough to want to commit additional financial resources through this round. This round also follows a competitive process in which we were fortunate enough to have multiple options for funding.
As you know from our all-hands last month, we have an aggressive roadmap for profitability and expansion this year, and those plans include increased investment in areas like marketing, technologies, and mobile. This new investment round will allow us to dedicate the resources we need, while also building a significant cash reserve against unanticipated events or bumps in the road.
This new investment does not change our plans to reach profitability, and we believe that a cash-flow positive and growing company will give us even deeper resources to take advantage of new opportunities, extend our promising lines of business, and expand a robust funnel of new customers. We will be sharing regular updates on our results and progress against goals as we move forward.
We’ve had a solid start to the year, and I am excited about the opportunity to solidify our path to success over the next couple months. Thank you again for your hard work and dedication.