Blog Post

LivingSocial Raises $25 Million To Expand Group Buying Service

LivingSocial, which develops various social apps and also runs a group-buying service, has raised $25 million in a second round of funding led by U.S. Venture Partners. The company’s flagship app is LivingSocial, which lets users indicate and share favorite things on social networks.

More recently, however, a second service — LivingSocial Deals — has gotten more attention. It provides local deals daily to subscribers via e-mail and Facebook that only go into effect when enough people agree to buy a product. LivingSocial says it will use the new cash in part to expand the number of cities where the deals exist to “dozens” by year-end.

The new cash comes as group buying has taken off, at least with investors: Rival BuyWithMe raised $5.5 million in a first round in late January, while Groupon — which is the best known company in the market — got a $30 million round in December.

LivingSocial willl have now raised a total of $35 million. The company told us in early January that it had raised $5 million in funding in a round led by Grotech Ventures and *AOL* Founder Steve Case and his wife, Jean. It had previously raised $5 million in a first round led by Grotech in July 2008. Other investors in this round include Grotech, as well as Case’s Revolution LLC.

About all of those ties to Case: LivingSocial co-founder Tim O’Shaughnessy previously led the consumer products team at Case’s Revolution Health and also managed product launches at AOL (NYSE: AOL), according to his bio.