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Living Social to Announce Funding Next Week: Sources

Friday, 18 Nov 2011 | 5:55 PM ET

Daily deal website LivingSocial aims to announce it has raised a new round of private capital early next week, according to sources familiar with the matter, a move that could be seen as a near-term substitute for an initial public offering.

Source: livingsocial.com

The new money is expected to come both from new and existing investors including JP Morgan Asset Management’s new Digital Growth Fund, as well as Amazon and T. Rowe Price.

LivingSocial and JP Morgan declined to comment. Amazon and T. Rowe Price were not immediately available for comment.

JP Morgan was chosen earlier this year to lead the company’s eventual initial public offering, and sources say the bank is also arranging a revolving credit facility of around $100 million so the company has capital for a rainy day.

The equity portion of the capital raise was said by sources to be a “moving target” but that it should settle around $200 million, valuing the company around $6 billion.

The Washington, D.C.-based daily deals site has its sights set on growth in the face of rising competition.

Industry peer Grouponwent public earlier this month after much criticism for creative accounting measures and unsustainable growth.

According to a presentation given to investors last week, LivingSocial’s 2011 second-quarter revenue grew 1,350 percent from the same period a year ago and its subscriber base reached 44 million people.

Follow Kayla on Twitter: @kaylatausche

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