LivingSocial Acquires ONOSYS As It Expands Into Online Ordering

Daily deal site and Groupon competitor LivingSocial just made a key strategic acquisition in its pursuit of new opportunities in the online take-out and delivery space, which it entered at the end of last month when it replaced its instant-deals offerings with a new “Takeout & Delivery” service. The company acquired by LivingSocial is ONOSYS, a company founded in 2003 that provides online and mobile ordering systems for restaurants. Terms of the deal were not discussed, but The Next Web uncovered an SEC filing that suggests LivingSocial issued at least $6.5 million in common stock to acquire the company, and likely added cash on top of that.

ONOSYS is a fairly well-established business with a strong client list that includes Applebee’s, Papa John’s, Panera and Boston Pizza, to name a few. LivingSocial Director of Corporate Communications Brendan Lewis told BetaKit in an interview that ONOSYS will continue to serve those customers as it has in the past, and wouldn’t comment on any planned integrations of ONOSYS’s systems into LivingSocial’s own online ordering options, which require users to have LivingSocial accounts in order to access credit cards on file.

Lewis wasn’t giving away any of LivingSocial’s plans for the new acquisition, but he did concede that “one could assume” the purchase is designed to further LivingSocial’s efforts in the online ordering space, which puts it into competition with companies like Seamless in the U.S., and international heavy-hitters like Just-Eat should the two ever enter the same international markets. Lewis said that despite any potential competition, LivingSocial is confident that the space still has a lot of room for growth.

“It’s a very young subset of the [restaurant] industry,” Lewis told us. “One that we see a lot of potential in, so we happily entered this market last month and we’re quite excited about it.”

Even with competition, the online food ordering business likely looks like blue skies compared to the daily deal space. As mentioned, LivingSocial shut down its instant deal service at the same time it launched the Takeout & Delivery section of its site, and its largest competitor Groupon is facing sub-par performance as a publicly traded company, along with a host of other problems. LivingSocial itself reportedly lost nearly $560 million last year, according to a regulatory filing by backer Amazon uncovered by Bloomberg in February.

The U.S. takeout and delivery industry is likely sized at over $200 billion annually, based on recent estimates, which helps account for its appeal to LivingSocial. With the ONOSYS acquisition, LivingSocial picks up not only industry experience and experts, but also a strong client list to add to its existing pool of over 2,700 restaurant partners. Lewis wouldn’t comment on whether food and delivery would become a primary focus for LivingSocial, or how that business might be integrated into its existing deals focus, but it seems clear the company is preparing a backup strategy in case the wind has permanently gone out of the sails of daily deals.

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