Amazon has drawn the short straw again. After Vente-Privée, Groupon was apparently the next interesting target to brush off the online retail giant. Amazon can/must be happy to get some share in the US based Groupon clone, Living Social. For this piece of Living Social (of unknown size), Amazon needed to dig deep into their pockets:
"LivingSocial has secured a $175 million investment from Amazon. LivingSocial has also secured an additional $8 million investment from Lightspeed Venture Partners.
LivingSocial will use this investment to maintain a steady drumbeat of worldwide launches and overall business growth while continuing to serve more than 10 million subscribers across the U.S., Canada, UK, Ireland and Australia in more than 120 locations.
Because of LivingSocial's rapid expansion, the company is currently booking revenues of more than $1 million a day on average and is projected to book well over $500 million in revenue in 2011."
Amazon is having difficulty gaining momentum in the new e-commerce areas. Even now only a few can understand why Amazon has taken a share of BuyVIP. Nevertheless, they did successfully manage to take over Woot!, a company which they held a minority stake in for 4 years.
Jeremy Liew from Lightspeed Venture Partners has confirmed explicitly that Amazon’s $175 million is a minority stake in Living Social.
Furthermore he has an included a strategy update that is a worthwhile read:
"This investment will fuel the company’s growth on three dimensions:
- International. Living Social recently bought a controlling stake in JumpOnIt, a local deals site in Australia, and have launched owned and operated sites in the UK and Canada. They’re actively looking at expansion into other geographies.
- Lifestyle focused deals. The company recently launched Living Social Family Edition and Campus Deals to target deals to the lifestyles of particular demographics.
- Vertically focused deals. Living Social recently launched a “near-cation” service called Living Social Escapes, focused on getaway travel. Their acquisition of Urban Escape is helping them create these amazing adventure experiences."
On the traffic side, Living Social is a distant number 2 behind Groupon.
Related posts:
- Amazon Acquires Private Shopping Club BuyVIP
- Woot! 2004 - 2010: After 6 Years, Sold To Amazon
- Groupon Fever: LivingSocial Nabs Another $25 Million
- More Funding for Groupon-like Clones
Originally posted in German by Jochen Krisch as two posts (1, 2) adapted for excitingcommerce.com by Jason Soo.
Wow, Amazon have really been aggressive in their approach to be the best and an unbeatable force in the live shopping market. I didn't realise until reading a few related posts here on excitingcommerce that not only have they invested $175 million in livingsocial but gone on and purchased woot. This is pioneer empire building at its very best.
Posted by: Nigel @tescowines | 12/15/2010 at 12:24 PM