A prospective startup gets a $ 20 million investment

Mobile geolocation startup Foursquare , which appeared last year, is still attractive for investors. The service allows you to mark places or places that you visit on city maps, leave feedback about them, record the frequency of visits, share this information with friends. The company agrees with the owners of establishments that the users of the service who most often visit certain places are given discounts. You can also track where your friends go and do it in near real time to join them. People advise delicious dishes in restaurants and bars, talk about discounts in stores, suggest where to go if someone is tormented by this question. The service is available to both site visitors and mobile apps for various platforms.





Many companies tried to invest their money in Foursquare and were even going to buy a promising startup. Finally, the next negotiations resulted in a $ 20 million investment from the Adressen Horowitz fund. With this transaction, the company's value is now estimated at $ 95 million. Adressen Horowitz joined the company's existing investors, Union Square and O'Reilly Alpha Tech venture funds, which invested $ 1.8 million in the project last year.





Startup CEO Denis Crowley (Dennis Crowley) said that a lot of work was done to attract investment at this stage and they are very pleased that everything turned out. Part of the funds raised is planned to spend on increasing the company's staff, which now has 27 employees. First of all, the company requires a large number of engineers. Another part of the funds will go to the development of the service.





The financing process was quite protracted. Crowley made a selection of bidders from the beginning of spring, when the first proposals appeared for acquiring a startup, first from Yahoo, and then from Facebook. At a certain point, the founders of the Anderssen Horowitz Foundation, in connection with the delayed negotiations, publicly stated that they were not going to invest in this company. But they later changed their minds and now Ben Horowitz praises Foursquare executive Denis Crowley on his blog. He considers the leadership qualities of Crowley to be worth the investment.

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Selling Yahoo 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 with a large organization with completely different goals. But given that Mark Andressen is a member of the board of directors of Facebook, 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 service users is constantly growing. An average of 15,000 new users are registered daily, 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 yet and want to give the company time to develop, before buying it.





Horowitz denies that Crowley chose them to subsequently join Facebook. Denis himself is on good terms with Mark Zuckerberg and does not need intermediaries to carry out such transactions. And their investments will help to move from the stage of a startup that makes a quality product to a large company. However, investors have not yet decided on a specific model of service monetization. It’s still not completely obvious, but there are many ways for Foursquare to start getting money from the project when the service reaches a large scale. The main question now is how to quickly increase the number of service users at least tenfold.





Bin Horowitz is convinced that the power of Foursquare is not geolocation (which many will soon have), but in the rapidly expanding social network. And the main task is not even to attract new registrations, but more people will know about the service and the desire to go somewhere would be primarily associated with Foursquare.



Source: Techcrunch