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|Foursquare, a New York-based social networking company, would consider a sale to a strategic player to provide liquidity for investors, said co-founder and CEO Dennis Crowley.
Asked by this news service about an exit for investors, Crowley said he saw three options: a sale, an initial public offering, or the company could remain independent. He did not provide a timetable for an exit.
Crowley declined to comment when asked about a TechCrunch report in April that said Yahoo (NASDAQ:YHOO) had engaged in talks to acquire Foursquare for USD 900m. Other media outlets cited sources who downplayed Yahoo’s interest in Foursquare.
The startup has raised more than USD 121m in capital and USD 41m in debt since its founding in 2009. Investors include Andreessen Horowitz, Draper Fisher Jurvetson, Microsoft (NASDAQ:MSFT), O’Reilly AlphaTech Ventures, Silver Lake Partners, Spark Capital, SV Angel and Union Square Ventures.
Crowley declined to comment on future fundraising needs.
Although Foursquare began as an application that allowed users to check into and share locations with friends, it later became a tool to search for restaurants, nightlife options and other venues. Last fall, Foursquare divided those functionalities into two separate apps. It launched a new app, Swarm, for checking in and sharing locations with friends, while its namesake app is now solely focused on restaurant and venue recommendations based on each user’s locations and preferences.
The move drew mixed reviews, with some users disappointed that Foursquare’s namesake app no longer provided the check-in capabilities that first made it popular, Crowley conceded. Even so, the startup’s decision to separate its local discovery service from its check-in function has accelerated the growth of both apps, Crowley said at VentureBeat’s GrowthBeat conference in San Francisco on 18 August.
More than 60 million users are registered on Foursquare, up from 55 million registered users in October, according to Crowley. The number of user-generated tips now exceed 75 million, up from 50 million in October, he said. More than 85,000 developers have built products using Foursquare’s data, he said.
“We’ve hit this scale where we’re not going away,” Crowley said.
Larger companies are taking notice of the more than seven billion check-ins at 65 million locations on its platform, Crowley said. The advertising platforms and enterprise tools it is building on top of the vast amounts of data it has collected can change and “disrupt” the marketing industry’s status quo, he noted.
Foursquare introduced an advertising platform, called Pinpoint, in April. It allows marketers to use the company’s check-in data to better target advertising across mobile and desktop devices.
In March, Foursquare CRO Steven Rosenblatt told GeoMarketing that the company’s revenues, which are primarily derived from advertising, have more than doubled over each of the last three years.
That same month, Twitter (NASDAQ:TWTR) started paying Foursquare to allow its users to more precisely pinpoint their location inside of tweets. Foursquare used to have a similar partnership with Instagram but after Facebook (NASDAQ:FB) purchased Instagram for USD 1bn in 2012, Instagram stopped using Foursquare’s location data and started using the Facebook equivalent, which Facebook obtained in its acquisition of a check-in app called Gowalla in 2011. Foursquare had been widely reported to have turned down acquisition overtures from Facebook a year earlier.
In addition to running up against the world’s largest social media company, Foursquare competes with Yelp (NYSE:YELP), which, like Foursquare’s namesake app, enables users to discover and review venues.
Foursquare has integrated with other notable tech offerings such as Google’s (NASDAQ:GOOG) Waze, Yahoo’s Flickr, Pinterest, Uber, and Microsoft’s Cortana.
by Troy Hooper in San Francisco
As seen in the mergermarket newsletter on 28/08/2015