Social discovery network LivingSocial, which lets people review and share books, movies, restaurants and other types of entertainment, just raised another $5 million in an extended first round.
The Washington D.C.-based startup plans to use the money to expand its group-buying deals. Collective buying is emerging as a lucrative field, as competitor Chicago-based Groupon also recently raised $30 million for a similar business model.
The premise is fairly simple: Get a local business to offer a deal only if a certain number of people sign up. Send it out on Facebook and if the crowd can round up enough people, the deal is on. There are extra little incentives built in to make it more viral. If a Facebook user can recruit three others to back the deal, they get the offer for free. LivingSocial gets a cut of the business it generates for the local merchant if the deal goes through.
The latest funding comes from earlier investors Grotech Ventures, AOL co-founder Steve Case and Jean Case. LivingSocial’s CEO Tim O’Shaughnessy also joins in.
And there’s a bit of deja vu involved. Back in 2008 the company also raised $5 million from Grotech and the Cases. Total funding now comes in at $10 million.