The number 10 million was notable for foursquare earlier this month, as the location-based mobile app reached the 10 million-user mark. The next important number for foursquare: 50 million, but dollars, not users.
Co-founders Dennis Crowley and Naveen Selvadurai announced on the foursquare Blog that the company raised $50 million in funding, with Andreesen-Horowitz leading the round and participation from existing investors O’Reilly AlphaTech Ventures and Union Square Ventures, along with newcomer Spark Capital.
The money will be used to expand foursquare’s engineering ranks, continue development of offerings for merchants, grow internationally, and explore new opportunities.
foursquare’s valuation now sits at some $600 million, according to TechCrunch, which added that the company kept its quest for financing quiet, speaking with few firms and leaving out heavyweights such as Kleiner Perkins and Benchmark.
Crowley told Mashable that unlike its competitors for merchant tie-ins — including Yelp, Living Social, Groupon, and Google — foursquare is focused on tracking how its referrals navigate the social graph and offering different types of rewards to new customers, repeat customers, referred customers, and mayors, saying about its developing platform for merchants, “We know what it’s going to be, we just haven’t flipped the switch on it yet.”
On its stealth search for capital, Crowley told Mashable, “Loose tweets sink companies. The series B played out very publicly, and it was hard for the company, so we came up with a better process this time.”
Crowley and Selvadurai wrote on the foursquare Blog:
foursquare is not just about the check-in, or recommendations, or points, or badges. It’s about making the world easier to use. It’s about discovering new places, connecting with friends, and forging new relationships with the places you visit. It’s finding new ways to layer technology on the real world. All of our employees believe strongly in this vision, and we’re incredibly lucky to have investors and a board that feel the same way.
The additional capital will allow us to move more quickly; we can hire more engineers (we’re hiring in New York and San Francisco!), evolve our merchant offerings, expand internationally, and try a ton of new things. In the past year, we’ve grown from 15 employees to more than 70, and our community has grown from under 1 million to over 10 million. The opportunity to build something meaningful in the location space is huge, and we feel well-positioned to capitalize on it. We’re encouraged by how far we’ve come, and we’re so excited to have such great support, from both our community and our investors, as we work to build what’s next.