Promising start-up gets 20 million investment
Foursquare Mobile Geolocation Startup, which appeared last year, remains attractive to investors. The service allows you to mark on the city maps the places or institutions that you visit, leave feedback about them, record the frequency of visits, share this information with friends. The company agrees with the owners of institutions to provide discounts to service users who most often visit certain places. You can also track where your friends go and do it in almost real time to join them. People advise delicious dishes in restaurants and bars, talk about discounts in stores, offer where to go if someone is tormented by this issue. The service is available both to site visitors and via mobile applications for various platforms.
Many companies tried to invest in Foursquare and even planned to buy a promising startup. Finally, regular negotiations led to a $ 20 million investment from the Adressen Horowitz fund. With this deal, the company’s value is now valued at $ 95 million. Adressen Horowitz joined the existing investors of the company, Union Square and O'Reilly Alpha Tech venture funds, which invested $ 1.8 million last year in the project.
Startup CEO Dennis Crowley said that a lot of work was done to attract investment at this stage and they are very glad that everything turned out well. Part of the funds raised is planned to be spent on increasing the staff of the company, which now has 27 employees. First of all, a company needs a large number of engineers. Another part of the funds will go to the development of the service.
The financing process was quite long. Crowley made a choice of applicants from the beginning of spring, when the first proposals for a startup appeared, first from Yahoo, and then from Facebook. At some point, the founders of the Anderssen Horowitz foundation, in connection with the protracted negotiations, publicly announced that they were not going to invest in this company. But later they changed their minds and now Ben Horowitz extols Foursquare CEO Denis Crowley on his blog. He considers Crowley's leadership qualities worthy of investment.
Selling a Yahoo service would be a mistake. A Facebook deal would be more interesting. But in any case, while Foursquare will act alone, and develop a product that is not burdened by a large organization with completely different goals. But given that Mark Andressen is a member of the Facebook board of directors, one cannot say that everything will remain so in the future.
The fact that Foursquare remains independent will allow them to find their way. Currently, the number of users of the service is constantly growing. Every day, an average of 15,000 new users are registered and their number today is already more than 1.8 million compared to 1 million in April of this year. Perhaps buyers are not in a hurry and want to give the company time to develop before acquiring it.
Horowitz denies that Crowley chose them to subsequently join Facebook. Denis himself has a good relationship with Mark Zuckerberg and does not need intermediaries to carry out such transactions. And their investments will help move from the stage of a startup making a quality product to a large company. However, investors have not yet decided on a specific model of service monetization. It’s still not quite obvious, but for Foursquare there are many ways to start receiving money from the project when the service reaches a large scale. The main question now is how to quickly increase the number of users of the service at least tenfold.
Ben Horowitz is confident that Foursquare’s strength is not in geolocation (which many will soon have), but in its rapidly expanding social network. And the main task is not even to attract new registrations, but to make more and more people aware of the service and the desire to go somewhere would first be associated with Foursquare.