LivingSocial raises $110m in new financing LivingSocial has raised $110m in new financing from existing investors, despite growing pessimism about the sustainability of the daily deals market. Tim O'Shaughnessy, chief executive, said the cash would tide the company over while it strives to reach profitability this year, a goal he had set for the company last year, but did not realise. "We have an aggressive road map for profitability and expansion this year, and those plans include increased investment in areas like marketing, technologies, and mobile," he wrote in an email to staff on Wednesday. This new investment round will allow us to dedicate the resources we need, while also building a significant cash reserve against unanticipated events or bumps in the road. The company undertook some severe cost saving measures at the end of 2012, after costs grew faster than anticipated revenues for the year. It laid off 20 per cent of its global work force, renegotiated contracts, and quietly shuttered international offices in the Middle East, the Netherlands and Mexico. While details of the transaction were not disclosed, aspects of the late-stage round made it difficult to calculate a valuation for the company, according to a person familiar with the deal. However, various signs in the public markets indicate that LivingSocial's valuation has gone down since it last raised $176m in December 2011 at a valuation of $6bn. Investors "would prefer that we were much more valuable," the person said. The sector has been very beaten down. Groupon, the largest daily deals company by sales, has seen its value plummet nearly 70 per cent in the last year. Its stock sold for nearly $20 in February 2012, and is now trading around $6. Analysts and researchers have also indicated that consumer interest in the kinds of discounts on restaurants and salons offered by Groupon and LivingSocial is waning. Both companies have focused on diversification strategies that broaden their offerings beyond their core daily deals businesses, though the success of those new segments are unclear. Mr O'Shaugnessy called the recent investment from current board members and investors "a tremendous vote of confidence in our business from the people who know us best." He said there were multiple options for funding, but the company decided to stick with investors who were most familiar with its operations and numbers. "They have reviewed our plans for 2013, and they are enthusiastic enough to want to commit additional financial resources through this round," he said.