Amazon has thrown LivingSocial a lifeline. The daily deals company has raised another $110 million, bringing the company’s investment funding to a staggering $910 million since its founding in 2007. Investors in this latest round include Steve Case, Grotech Ventures, Revolution, US Venture Partners, Lightspeed Venture Partners, JP Morgan, T. Rowe Price, and Amazon.
The news was leaked to employees in a memo this week, according to the Washington Post.
Amazon had previously invested $175 million to take a 29 percent stake in the startup, a stake that has since declined to $52 million due to a number of operational costs that weigh down the company. Though LivingSocial managed to more than double its revenue last year to $536 million up from $250 million, it nevertheless had a net loss of $650 million, an increase over the $499 million loss the company had in 2011.
As the wind goes out of the sales of daily deal startups, LivingSocial struggles to regain share of the market in a turbulent and crowded space. Its rival, Groupon, has also struggled to maintain relevance since its troubled IPO in 2011. Groupon’s stock debut at $20 a share, but is currently worth around $5.60.
Last November, LivingSocial laid off 400 employees, or 10 percent of its work force. In December, PandoDaily reported LivingSocial was running dangerously low on cash and owed a lot to merchants.
This latest investment will be used to build reserves, solidify long term strategies, and attempt to reach profitability.
“…we have an aggressive roadmap for profitability and expansion this year, and those plans include increased investment in areas like marketing, technologies, and mobile,” the memo reads. “This new investment round will allow us to dedicate the resources we need, while also building a significant cash reserve against unanticipated events or bumps in the road.
“This new investment does not change our plans to reach profitability, and we believe that a cash-flow positive and growing company will give us even deeper resources to take advantage of new opportunities, extend our promising lines of business, and expand a robust funnel of new customers,” the memo added.