LivingSocial, the number two player after Groupon in the booming daily deals market, has selected three Wall Street banks to underwrite its initial public offering, CNBC (NSDQ: CMCSA) reported Friday. Bank of America’s Merrill Lynch division, Deutsche Bank and J.P. Morgan Chase will lead the IPO, which is expected to raise $1 billion. That means none of the major Wall Street banks will be left out of the daily deals IPO rush: the other three big banks, Morgan Stanley, Goldman Sachs, and Credit Suisse, are running Groupon’s IPO. Everybody’s a winner!
LivingSocial, which is estimated to pull in $1 billion in revenue this year, is starting to take a bite out of Groupon’s market share. The company had 24 percent of the market in May, up from 20 percent the previous month, according to research firm Yipit. Groupon, meanwhile, saw its market share decline from 52 to 48 percent.
LivingSocial’s IPO, which could value the company implicitly at $10 billion to $15 billion, follows closely on the heels of Groupon’s announcement that it planned to go public in a $750 million IPO. Groupon is substantially larger than LivingSocial, and its implied valuation could top $20 billion after the offering.
Both companies appear to be feeling some urgency to go public, with Facebook and Google (NSDQ: GOOG) moving aggressively into the daily deals space. The two companies are just the latest in a wave of internet company IPOs, the likes of which the market hasn’t seen in over a decade, since the dot-com collapse.
Groupon has a bit of a head start. It’s already filed its S-1 registration statement with the SEC, while LivingSocial has yet to do so. A LivingSocial spokesperson said the company doesn’t comment on “rumors or speculation.”
Founded in 2007, Living Social has raised $632 million in five rounds from Grotech Ventures, US Venture Partners, Lightspeed Venture, and former AOL (NYSE: AOL) chief Steve Case, who could be poised for a huge windfall. (Case participated in LivingSocial’s $5 million “Series A” round in 2008, according to CrunchBase.) Three of the cofounders came from Case’s Revolution Health; one, CEO Tim O’Shaughnessy, also is an AOL alum.