What Foursquare's New Cash Infusion Means
Foursquare: It's five years old and had taken $71.35 million in three rounds of venture funding, plus $41 million in debt financing. Now, it adds $35 million in a Series D round, according to a company blog post by founder and CEO Dennis Crowley.
No wonder the company has remained optimistic despite continued skepticism from the press this year over its trajectory.
The new funding comes from Barry Schuler's investment fund, DFJ Growth, which is based in Silicon Valley, and New York City-based Capital Group's Smallcap World Fund, an open-ended equity mutual fund. Barry Schuler, the managing director for DFJ Growth, and a columnist for Inc.com, joins the company's board.
According to a company spokesman, Foursquare will use the funding to bolster its engineering team and its location products, including sending tips and recommendations to passive users. It will also continue hiring in New York City and San Francisco, and expand its sales team.
International growth is also a priority. Foursquare will be "adding staff and working with strategic partners to launch monetization efforts in new markets," the spokesman. In AllThingsD, Kara Swisher reports Crowley says:
"I think this round validates what I have been saying for a while--that these new passive awareness technologies are pointing to how we are going to take this company to a new level. The steps we have taken over the last year have made us able to show investors the opportunities we have with the product."
Forty-one million is a staggering amount of money, bringing the total Foursquare has raised to $147 million. But it's not as much as Facebook or Twitter took in as private companies. They raised a respective $2.33 billion and $1.16 billion.
It's been a tumultuous year for Foursquare in the media. Fast Company pondered whether Crowley would ever successfully turn his audacious idea for making geolocation ubiquitous into a sustainable business. Data and market-research company PrivCo had at that point already predicted that Foursquare would fail by the end of the year, just months after the Wall Street Journal noted that investors were growing cold over Foursquare.
But the company says it's grown to 45 million registered users of the Foursquare app, and has built out and launched four new monetization tools in the past year.
At South by Southwest last March, Crowley spoke candidly about the company, and expressed great optimism over being able to soon track users, and provide recommendations to individuals whether they were using the Foursquare app or not. And, sure enough, a new version of the app rolled out this year that automatically gives users tips about locations they're visiting--without requiring their check-in to that location.
Maybe 2014 is looking brighter for Crowley. At least it's another year his company won't check out for good.
This article was updated December 19, 2013 at 4:27 p.m.
CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer
Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.