x Abu Dhabi, UAEFriday 21 July 2017

GoNabit is part of a $1bn daily deal IPO proposal

LivingSocial, a website devoted to daily coupons, is seeking to raise about $1bn in an IPO.

LivingSocial's offices in Washington may belie its status as an increasingly important global brand. Jacquelyn Martin / AP Photo
LivingSocial's offices in Washington may belie its status as an increasingly important global brand. Jacquelyn Martin / AP Photo

A week after acquiring the Dubai-based group-buying company GoNabit, LivingSocial is selecting investment banks for an initial public offering that may value the company at US$10 billion (Dh36.73bn) to $15bn, according to a person with direct knowledge of the talks.

LivingSocial, a website devoted to daily coupons, is seeking to raise about $1bn in an IPO and has had conversations with Barclays, JPMorgan Chase and Allen & Co to lead the offering, said the person, who asked not to be identified.

LivingSocial also has talked with other banks for the IPO, which may happen by the end of the year, the person said.

LivingSocial bought GoNabit, a home-grown website for daily deals, for an undisclosed sum. GoNabit operates in the UAE, Egypt, Lebanon and Jordan, and claims to have saved consumers more than $5 million in the past year. Group-buying websites typically sign up a range of businesses to offer discounts, and take a percentage of the revenue.

LivingSocial would follow internet companies LinkedIn, Yandex and Renren in raising money from public markets, as well as the global market leader Groupon, which filed for a $750m IPO on June 2. Groupon has more than 7,000 employees and sells coupons in more than 500 cities.

LinkedIn, the professional-networking site, was the first major US social-media company to sell shares in an IPO. Its stock more than doubled in the first day of trading last month.

The business network CNBC reported on Thursday that LivingSocial was in talks with banks for an IPO, without naming them.

LivingSocial, led by co-founder Tim O'Shaughnessy, raised $400m in April, valuing the company at $3.5bn, it was reported at the time. The company would generate $1bn in revenue this year, sources said.

The company is tripling its workforce to 1,800 this year and plans to more than double the cities where it offers deals to 300, Mr O'Shaughnessy said in an interview in December.

LivingSocial claims 24 per cent of online daily deal revenue in top North American markets, according to a study released on Thursday by the internet company Yipit.

The daily-deal market may generate $3.9bn in US sales in 2015, compared with $873m last year, according to the US research firm BIA/Kelsey.

Investors in LivingSocial include the Twitter backer Institutional Venture Partners. In December, Amazon.com invested $175m in the company.

As many as 20 group-buying websites are believed to have launched in the Middle East, including Groupon, this year.

* with Bloomberg News