Groupon acquiring one-time rival, LivingSocial for undisclosed sum

By : |October 27, 2016 0

Deals’ platform Groupon is acquiring its one-time archrival LivingSocial for an undisclosed amount. The announcement was a small sidenote in Groupon’s Q3 earnings results, which beat analysts expectations on revenue of $720.5 million.

Amazon-backed LivingSocial laid off more than half of its workforce in March, part of a downward spiral from the stronger days of 2011 when it was valued at $6 billion in a funding round.

CIOL Groupon acquiring one time rival, LivingSocial for undisclosed sum

Groupon also announced similar plans of downsizing its overall business, on top of the several closures and layoffs of the last few quarters. In Q2 the company was functioning in 27 markets; the plan is to bring that down to 15. “We are pursuing strategic alternatives and other options to exit the remaining countries, which we expect will continue into 2017,” the company noted.

Both Groupon and LivingSocial have been trying to expand their offering. While Groupon has been converting itself into an online marketplace, LivingSocial had turned to a strategy involving credit-card discounts at restaurants.

The acquisition will be a good fit because it will expand Groupon’s customer base and because LivingSocial also provided deals for local businesses, Groupon Chief Executive Officer Rich Williams said.

Groupon itself seems to have lost much of its sheen since its heydays as the promise of e-mail deals proved difficult to convert into a large-scale business. Valued at $16.7 billion when it went public in 2011, the Chicago-based company had a market capitalization of $3.02 billion at Wednesday’s close.

But Williams is still hopeful. The company says it added 1.2 million customers in the last quarter and posted gross billings of $1.43 billion.

“Our strategy continues to deliver results with double-digit growth in North America local billings and our highest quarter for customer acquisition in over three years,” said Groupon CEO Rich Williams. “We are looking forward to a strong finish to the year and further progress on our mission to make Groupon a daily habit for consumers.”

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