LivingSocial Planning $1 Billion IPO, Banks Selected to Lead Effort

Groupon's biggest competitor, LivingSocial, has picked three banks to leads its IPO, including JPMorgan Chase, Bank of America Merrill Lynch and Deutsche Bank as lead underwriters.

LivingSocial is expected to file for an IPO in the next few weeks, leading to a public launch of its stock within 90 days, likely. LivingSocial is expected to raise in its IPO $1 billion, a figure that values the online social coupon network in a range of $10 billion to $15 billion.

Just three months ago LivingSocial raised $400 million in private capital fundraising, valuing the company at only $3 billion -- yet the IPO valuation 90 days later is four times higher.

LivingSocial is the second largest web-based daily deals company behind Groupon.

Based in Washington, D.C., LivingSocial saw its marketshare increase in the fast-growing daily deals segment to 24 percent in May, from 20 percent the previous month according to Yipit, which tracks industry activity. Chicago-based Groupon is still the biggest daily deals company but LivingSocial apparently claimed some of its momentum in May, as marketshare dropped to 48 percent in May from 52 percent the previous month.

In 2010 Groupon reported a 20-fold increase in sales.

Groupon is also marching fast toward an IPO. The company filed paperwork with the SEC to initiate the process on June 2, with plans to raise $1 billion. Typically, 60 to 90 days is the minimum time frame to reach public stock tradiing once such paperwork is filed, meaning Groupon's IPO is still another two to three months away.

Both companies are viewed as hurrying stocks to public trading while they are in a fast growth mode at a time technology IPO's have been hot on Wall Street. Professional connection site Linkedin Corp recently went pulbic as did web-based music services Pandora Media Inc. Linkedin priced at the top of its anticipated price range when the stock began trading, while Pandora priced above its expected price range - and both launched publicly within the past 60 days.

LivingSocial and Groupon control roughly 90 percent of the hot daily deals space, but competitors are looming, as Google and Facebook are among the companies trying daily deal products in some U.S. markets.

Estimates suggest the daily deal market could reach almost $4 billion over the next four years, more than four times bigger than the estimated $870 million the space generated in 2010.

LivingSocial has raised to date more than $400 million in venture funding from investors, including Amazon. The company is expected to select banks that will be involved in its IPO by the end of this week.