Big Money, Small Deals, Youthful Leaders

The deals they tout are local and can range from small to large.

But the money involved in the battle between the dominant two emerging local e-coupon marketers is huge, as the latest round of funding for LivingSocial shows. The coupon company last week raised $400 million in venture capital, sources tell the New York Times Dealbook and the Wall Street Journal.

Among those contributing to this round were Amazon.com, the e-commerce giant that had already placed a $175 million bet on the Washington, D.C.-based LivingSocial headed by Tim O'Shaughnessy. Other contributors to the round included T. Rowe Price, Lightspeed Venture Partners, and Institutional Venture Partners. The deal values LivingSocial at $3 billion—more evidence, if any were needed, that the latest round of Internet valuation inflation is well under way.

“The investment is certainly a milestone in the company’s evolution,” O’Shaughnessy, who wouldn’t talk specifically about the valuation, told Dealbook. “But it’s just that—a milestone, not the endgame.”

The latest round for LivingSocial shows that it is by no means shrinking from a fight with Chicago’s Groupon, headed by Andrew Mason, which Mason is considering taking public for a record $25 billion.

Even though Groupon is arguably the fastest-growing Internet firm of all time, LivingSocial isn’t shrinking from the opportunity to knock Groupon from its throne atop the local coupon deal game.

The companies make for interesting comparisons, starting with their CEOs. Both CEOs went to elite universities and are known as high-powered personalities.

Mason is known as a practical joker, and his company has reflected that personality, even to the point of going over the edge with the jokiness in a Super Bowl ad this year that seemed to make light of China’s occupation of Tibet. Mason graduated from Northwestern University with a degree in philosophy before moving on to start Groupon.

O’Shaughnessy, a graduate of Georgetown University, told the Washington Business Journal his dream had been to be a professional baseball player, but settled instead on running a hard-charging Internet company in 2007. Both his father and grandfather had run small businesses, and he had started his life as an entrepreneur with a lawn service while a teenager.

Unlike the T-shirt-wearing Mason, O’Shaughnessy is more of a business type, wearing crisp shirts and traveling to work for a year on a Segway, Dealbook reports.

It almost goes without saying that the two leaders of the rivals are hard-chargers.

But here’s how O’Shaughnessy told the Business Journal he starts his days:

The very first thing I do when I wake up, sometime between 5 and 6 a.m., I immediately grab the iPad to check revenues from the day before and how they’re trending for that day. We are a local business, but we’re very global, 95 markets in three countries. I probably spend 50 percent of my time on the road.

With both young men leading young companies on high-growth, high-dollar roads, the question arises: Is there room for just one dominant local coupon site, or will LivingSocial and Groupon be the next generation’s version of Microsoft and Apple?

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Kent Bernhard Jr. is News Editor of Portfolio.com