Foursquare Gets $41m Investment Despite User Apathy
Foursquare may not be as hip as Facebook or Twitter, but VCs think location will happen one day…
Social location application Foursquare has had an additional $41 million (£26.8m) investment, despite disillusion in the industry with what it has achieved with the $100 million it previously raised.
Launched in 2009, Foursquare allows users to “check in” to locations to meet friends, but has since shifted its focus to the crowded field of mobile search. Silver Lake Partners, Andreesen Horowitz and Union Square Ventures have given it $41 million, much of it in the form of a loan, betting that Foursquare can improve on the slow take-up of location-based social networks.
Foursquare failure?
At its launch in 2009, Foursquare “gamified” location services on smartphones, by giving its users points for checking in at specific locations. Users who accumulated enough points could become the “mayor” of particular places.
Four years on, its growth has not matched that of Facebook or Twitter. It has 30 million users, which isn’t as many as early backers, who expected explosive growth, had hoped for.
It has announced a change in direction, to focus on local search, finding nearby businesses for mobile users. But this has not convinced commentators, who point out there are plenty of big competitors including Yelp and Google. “Whereas Foursquare-as-game was more or less unique, providing local reviews and recommendations is a crowded field,” said Chris Williams in the Daily Telegraph.
Foursquare founder Dennis Crowley has said his product does it better – offering a more personalised search, that he prefers to call “discovery”.
This may have convinced the investors to chip in again, along with Foursquare’s other strength – its developer network. Foursquare is used as a location platform for many newer apps, including Evernote and Instagram. “While not nearly as visible a part of the business as the consumer-facing app, the API is a hit with developers, some 40,000 of whom use it for location and venue data,” commented Forbes.
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