Groupon competitor LivingSocial met with bankers this week to discuss a $1 billion public offering, according to CNBC.
The IPO could value LivingSocial, which expects to generate $1 billion in revenue this year, at $10 billion to $15 billion. LivingSocial is the number-two player in the booming discount-deal space after Groupon, which itself is preparing to raise $750 million when its goes public. Groupon’s IPO could value it as high as $25 billion, according to media reports.
As competition in the deal space heats up, LivingSocial is starting to take a bite out of Groupon’s market share. LivingSocial had 24 percent of the market in May, up from 20 percent the previous month, according to a Bloomberg story that cited market research firm Yipit. Groupon saw its market share decline from 52 to 48 percent.
And both companies are hearing footsteps from giants like Facebook and Google (NSDQ: GOOG), with the latter moving aggressively into the space with Google Offers. That could be one reason why both Groupon and LivingSocial appear in such a hurry to go public.
Living Social has met with bankers from Barclays, JPMorgan Chase and boutique tech/media investment bank Allen & Co., according to Bloomberg.
The internet IPO market is hotter than it’s been in a decade. Web video game giant Zynga is expected to file documents with the SEC Thursday announcing its intention to go public at a valuation that could exceed $15 billion. Facebook, the big Kahuna, is expected to go public sometime early near year at a valuation of over $100 billion.
The last IPO boom ended in the dot-com crash a decade ago, which wiped out billions of dollars of shareholder money and helped send the U.S. economy into a recession.