Foursquare Banks $20M to Fuel Location-based Service
Foursquare June 29 said it raised $20 million in funding from Union Square Ventures, O'Reilly AlphaTech Ventures and Andreessen Horowitz. The money will be used to help the location-based Web service hire more engineers and build out infrastructure to expand its appeal beyond today's 1.8 million users. Foursquare, along with Google, Twitter, Gowalla, Brightkite, Loopt and others, is seriously investing in location-based services to stimulate more interaction among users. The idea is that the advertisers will then go where the users are.Location-based service Foursquare June 29 said it raised $20 million in series B funding from Union Square Ventures, O'Reilly AlphaTech Ventures and Andreessen Horowitz. Foursquare's 1.8 million users vie for points, badges, mayor status and sometimes discounts by checking into bars and restaurants from their mobile phones.
The game serves as an example of how location-based advertising might work beyond simply luring smartphone users to retail stores by pinging their handhelds with advertisements. That is, it's more fun and interactive because it lets users compete while connecting them with businesses they patronize.
New financier Andreesen Horowitz was forged earlier this year by Netscape browser creator Marc Andreessen and business partner Ben Horowitz, who Crowley fairly described as "each legends in Silicon Valley." Horowitz said his firm funded Foursquare because Crowley is running it; it's a killer product; and there is a major addressable market where users, shop owners, venue owners, brand advertisers and others can benefit. "The only thing better than the CEO being the keeper of the vision is the CEO being the creator of the vision," Horowitz said in a blog post June 29. "In Foursquare's case, Dennis not only created the vision for the company, but for the entire product category. Beyond that, he is very clearly the thought leader in the market." He added that Foursquare is growing faster than Twitter did at this stage, going from just 1 million users in April to 1.8 million through June, adding around 15,000 users per day. Finally, he said more than 200 million people and growing worldwide have smartphones and Foursquare is positioned to capture a huge portion of the market "because it's incredibly fun and addicting."