LivingSocial Financials Exposed: $2.9 Billion Valuation, $50 Million In Revenue Per Month
There's nothing like full disclosure during the negotiating process in an acquisition deal. LivingSocial acquired SocialMedia for just $3 million in stock, we reported earlier today.
Context & Ripple Effects
The numbers come out sideways: because LivingSocial had to open its books while negotiating the small SocialMedia acquisition — a $3 million all-stock deal — its Certificate of Incorporation filing exposes what no press release would have: a $2.9 billion valuation on roughly $50 million in monthly revenue. That filing is the same document behind last week's authorization of up to $565 million in Series E funding, so the valuation figure effectively pre-prices the round before it closes.
The arc here is rapid escalation on the back of one promotion: Amazon's $175 million investment in December 2010 bought LivingSocial distribution, and by January the $10-off-$20 gift card push had sold a million cards worth $20 million. Silicon Alley Insider's read of the round adds a second layer — founders and early investors pocketing around $200 million in cash alongside the raise — which makes this less a growth financing than a partial exit at a headline valuation.
First-order effects
- LivingSocial's Series E now negotiates against a documented $2.9 billion mark and ~$600M annualized revenue run-rate disclosed in its own incorporation papers, removing the information asymmetry that usually favors the company in a raise.
- Groupon, the market leader in daily deals, loses control of the valuation narrative: a direct rival's private books are now public benchmarks for every investor pricing the category.
Second-order effects
- If the reported $200 million founder/investor cash-out repeats across mega-rounds, later-stage deals investors face a two-tier structure where new money buys growth risk while insiders take liquidity off the table at the same price.
- Amazon's stake gets marked up passively: its December 2010 check now sits inside a company claiming a near-$3 billion valuation eleven months into the daily-deals boom, raising the bar for whatever follow-on capital it or others commit.
Third-order effects
- Daily-deal valuations are being set by private filing disclosures rather than public markets, meaning the sector's true clearing prices surface only through M&A paperwork and amended charters — a structural opacity that persists until someone files an S-1.
- A revenue run-rate of $50 million a month against heavy promotion-subsidized customer acquisition sets up the classic question for the category: whether these marks survive once discounts stop buying growth.
The trend: Late-stage consumer internet companies are setting multi-billion-dollar private valuations through mega-rounds that bundle insider liquidity, with the real numbers leaking only via acquisition-negotiation filings.