LivingSocial Raises $14M to Expand Social Group Deals Service

LivingSocial raised another $14 million this week, fresh after a round of $25 million fundraising last month, and a spokeswoman tells us the infusion will help it to continue to expand its Deals service — currently a primary revenue source for the company. Deals has been made popular in a big way by Facebook users. Through implementing the new Facebook plugins, the company hopes to grow even more.

LivingSocial Deals is a free service launched last summer inviting people to buy deals on restaurants, hotels, sporting events and spas in their areas via Facebook Connect, an iPhone app or their web site. Here’s how it works: Elect to buy a deal in your area and share it. If three of your friends buy it, too, you get one free. Then, if a critical mass of people in your area purchase the deal, all participants get a coupon to redeem the discount. What Deals offers users is a social experience of hunting for savings — you can not only get a great deal on a spa but you can do it with your friends — and since you can use Facebook Connect, you can integrate your cost cutting with your existing network of friends.

The service is available in 18 cities, including New York City, San Francisco, Austin, Seattle and Atlanta and Deals recently launched in Portland, Orange County, Charlotte and Philadelphia.

Deals is currently LivingSocial’s big moneymaker, company spokesperson Korina Buhler tells us, which is why the bulk of this capital is set to help launch the service in more cities in the U.S. “Everyday we get requests from users via Twitter, Facebook and email to bring our Deals program to their area, so, with this funding we are able to do that,” she tells us.

Facebook figures prominently in Deals, as many users are channeled from LivingSocial’s apps to Deals, allowing the company to build the customer base very quickly, Buhler explains. About half of Deals customers are logging in using their Facebook identity when they make a purchase — and that number has been growing.

The company’s new LivingSocial 365 was also recently outfitted to tap into the Open Graph API. LivingSocial 365 is a service that suggests interesting things for users to do in their city — integrated into Deals, so when like or comment on these activities they appear in the users’ news feed for their network to see.

This latest $14 million in funding comes from a Series C round of funding led by Lightspeed Venture Partners, in addition to U.S. Venture Partners, Grotech Ventures and Steve Case’s Revolution, LLC, money that will aid LivingSocial in expanding deals to dozens more U.S. cities this year. The back-to-back rounds of funding have happened as a competitor, Groupon, just raised a massive $135 million round of funding — the group coupon business has obviously gotten hot lately. For more on the market, check out this post by Lightspeed’s Jeremy Liew.