Foursquare, a mobile app that uses location-based technology to connect consumers with their friends, has secured $41 million in additional funds—a combination of new investment from the Silver Lake Waterman growth debt fund and convertible debt from all existing investors, which includes venture capital firms Andreessen Horowitz, O’Reilly AlphaTech Ventures, Spark Capital and Union Square Ventures.
Foursquare co-founder Dennis Crowley announced the news on the official company blog.
“The stuff we’re building takes a lot of work,” Crowley writes. “We’re building tools for local businesses to connect with their customers. We’re making search better, every single day. We’re building that location layer for the Internet. This takes time and a lot of work, and great investors.”
Foursquare tells Internet Retailer that the new funds will be used to expand foursquare’s business operations and grow the engineering and sales teams.
Foursquare users check in at locations registered in the app. Locations vary widely and include retail stores. Users can search for places nearby or see things like trending places and top picks. The app displays a map with nearby friends and interesting places highlighted. The app also displays personalized recommendations and friends’ check-ins.
Crowley says 1.3 million businesses use foursquare. Businesses can deliver promotions when a user checks in at their location and purchase ads that appear with search results. Crowley also says in its four years of operation foursquare has registered 3.5 billion check-ins. In the blog post, he thanks the “33,000,000 of you who have given us a try.”
Regardless of foursquare’s ability to raise funds, some experts question the influence the app will have on the future of mobile commerce.
“The vast majority of those 33,000,000 people do not actively use it, people who have once used it no longer do, and it’s unclear if the number of users is growing at all,” says Sucharita Mulpuru, a vice president and principal analyst at Forrester Research Inc. “It’s not clear that local discovery is something most consumers need, want or find useful—maybe when they’re traveling or if they live in New York City or San Francisco, but for most people, most of the time it’s just not that relevant. Check-ins were a hot thing for a brief period of time in the San Francisco venture capital community awhile back, but let’s face it, they never really took off and it’s just not something consumers are in the habit of doing yet.”
Foursquare confirmed that it has more than “33,000,000 people in our community” but says it does not disclose the number of active users.Favorite