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Foursquare, the smartphone app which lets one “check in” at various real-life locations, proceeding to use that information to spam ones mates via every social network under the sun, is close to locating a bit of funding of its own, it has been reported.
An inside source purportedly told the Wall Street Journal that Silicon Valley venture-capital firm Andreessen Horowitz would likely lead the funding which could be announced at some point this week.
Back in September, Foursquare managed to convince New York venture-capital firm, Union Square Ventures, to part with some $1.35 million in cash – which some believe to be a pittance for an app which has skyrocketed in public popularity, if not profitability.
Indeed, despite having become the most popular location-based service on the smartphone block – neighboring Gowalla – Foursquare, like Twitter and Facebook before it, has yet to figure out how to make money from its immense popularity.
After all, it’s all well and good allowing people to crown themselves “Mayor of Starbucks,” and unlock a little badge, but how does one go about translating that into real cash?
Starbucks has already tried to cash in by offering coupons to frequent Foursquare check-ins, but the model has yet to take off in a big way.
Incidentally, Foursquare has apparently already had serious acquisition discussions with Facebook and Internet portal Yahoo, but nothing has yet to come of these.
With 1.7 million users since its launch in March 2009 – and up from just 750,000 in March – Foursquare’s CEO, Dennis Crowley doesn’t see any sign of his firm’s meteoric rise slowing down any time soon. “We are picking up 100,000 users every 10 days,” he told the WSJ. Almost half of those check in someplace or other at least once a month too, making the service an active app.
Foursquare also seems to have formed itself a rather valuable team, with members hailing from the likes of Google and Yahoo, including a former Yahoo senior director, Holger Luedorf, now Foursquare’s vice president for mobile and partnerships. In total, the firm has 27 employees, a steep climb from the five it had back in January.
Investors will now have to decide whether Foursquare can actually offer a better business model than the likes of Twitter – which also has a location based service – or reviews site Yelp, which already has a steady flow of revenue from advertisers and is introducing a similar check-in system for smartphoners.
Check in with RCR Unplugged and we’ll keep you up to date with the Foursquare investment news as we hear it.
