Foursquare Closes $50 Million Funding
The funding news followed closely on the company hitting the 10 million-user mark and rolling out an expanded partnership with American Express.
The program provides special deals to AmEx cardholders that check in via Foursquare at certain retailers and New York restaurants. Foursquare CEO Dennis Crowley said in a blog post the start-up would use the new capital to accelerate growth, with plans to hire more engineers in New York and San Francisco.
In the last year, Foursquare has ramped up from 15 employees to 70 as the user base has grown tenfold from 1 million a year ago. "The opportunity to build something meaningful in the location space is HUGE, and we feel well-positioned to capitalize on it," wrote Crowley.
The company unveiled the latest version of its mobile application in March, adding features like personalized recommendations, as well as new types of special deals that retailers and restaurants can offer to customers who use Foursquare. The deal with American Express signals another step toward rewarding users with more tangible benefits for checking in than becoming "mayor" of a location or racking up virtual badges.
Although Foursquare isn't gaining revenue from the partnership, teaming with financial giant American Express gives the fledgling company a new measure of credibility and points to future revenue-generating deals. Expanding the user base beyond the core of tech-savvy young urbanites has been a key challenge.
A Pew study released last November indicated that only 4% of U.S. adults that go online were using "geosocial" service like Foursquare and Gowalla.
A graphic posted last week by Foursquare showing its growth over the last two years, however, underscored its international growth, especially in Europe and Asia. There have been 358 million check-ins outside the U.S. (including those from U.S.-based users abroad), according to company-supplied data.
Per TechCrunch, the $50 million funding round would give Foursquare a post-investment valuation of $600 million. Lead investor Andreessen Horowitz is the Silicon Valley venture capital firm started by Netscape co-founder Marc Andreessen.