Aug 12, 2013 · 2 minutes

Daily deals company LivingSocial’s recent troubles have been well-documented, but now its pain appears to be going international. One of South Korea’s leading business newspapers has reported that LivingSocial is looking to sell Ticket Monster, which had been considered one of South Korea’s biggest tech success stories.

LivingSocial acquired Ticket Monster in August 2011 for a sum estimated to be between $150 million and $300 million (the actual figure wasn’t disclosed). Two years later, however, it seems LivingSocial has signed up JP Morgan to underwrite the sale of Ticket Monster, according to the Maeli Business Newspaper, which is like the Wall Street Journal of Korea. Private equity funds and ecommerce businesses in the US, Singapore, and Japan are said to be among the potential buyers.

The newspaper suggested Ticket Monster will be a tough sell. Last year, the company reported $73 million sales with a net loss of $74.8 million. At the same time, key executives are leaving the company, including chief operating office Lee Kwan Woo and store team manager Kim Jong Hwa. A slew of other executives have also left, according to our sources.

Talk of the Ticket Monster sale represents more bad news for LivingSocial, which has been in the news for all the wrong reasons of late. Recently, it shut down its local events business, Adventures, and laid off 30 full-time employees, only to temporarily reinstate some of them the very next day. It has also closed its offices in New York and Seattle, with plans to let go of dozens of part-time employees.

More importantly, however, it’s bad news for South Korea’s fledgling startup ecosystem. Ticket Monster’s apparent struggles cast a pall over the company’s early success and the big acquisition, which inspired many young people in South Korea to get involved in startups. Also, in a country dominated by conglomerates such as Samsung and LG, and in a culture that doesn’t exactly embrace risk, this turn of events may result in more skepticism about startups, which some people see as a “get rich quick” scheme. Ticket Monster sold within 18 months of its founding.

Update: LivingSocial has responded to our request for comment with the following statement:

TicketMonster is a great business and we are not surprised that their success is widely recognized. We've included below for your reference some recent growth indicators:
  • TicketMonster has over 10 million subscribers in Korea
  • Gross profit has increased by 75+% compared to the first half of 2012
  • Gross billings increased by 60+% compared to the first half of 2012
  • Over 5 million mobile app downloads
With regard to a sale, we have nothing to announce at this time.

[Image Credit: alykat on Flickr]