LivingSocial, the online deals site based in Washington, D.C., that was once valued at $6 billion, announced Wednesday that it is selling itself to rival Groupon for an undisclosed sum.
Both companies run Internet-based “daily deals” businesses that offer discounts and other offers for local businesses, helping consumers save money and store-fronts drive traffic.
For LivingSocial, the sale is the latest turn for a company once heralded as the harbinger of Washington’s tech-centric future. LivingSocial was a rare consumer-facing company in a town better known for government. So rapid was its growth in its early days that it was wooed by counties and towns alike looking to bring new energy to their local economies. Then-D.C. Mayor Vincent Gray fought hard to keep the company from leaving the city, engineering a rare $32.5-million tax break linked to delivering plenty of new jobs.
The jobs never quite materialized as the daily deals business sputtered. Earlier this year LivingSocial announced plans to lay off 160 employees, more than half of a workforce that once numbered in the thousands. In 2014 the company said it would lay off 400 as part of the restructuring.
Groupon, long considered LivingSocial’s closest rival in the daily deals space, has also been struggling. On Wednesday, the company reported a loss of nearly $38 million on revenue of $720. 5 million in the quarter ending Sept. 30. Last year, Groupon said it would lay off more than 1,000 employees as it shuttered offices in six countries.
Groupon disclosed the acquisition Wednesday in a terse couple of sentences in its earnings report, which did not offer details about the price, saying only that the amount was “not material” to its own financial balance sheet. Groupon said it expected to close the deal in early November. Representatives from both companies did not immediately respond to requests for comment.
In a statement, LivingSocial said there would be “no change at this point” with respect to its consumer- and business-facing operations.
“This brings together the two pioneering companies in the local space to help merchants grow their business and consumers get great value on local services and activities,” LivingSocial said in a release.
Aaron Gregg writes for the Washington Post.