Foursquare announced on its blog today that it has closed a series C round of funding for $50 million. It’s mostly current investors doubling down, with Andreeson Horowitz leading the round and Union Square and OATV re-upping as well. Spark Capital is joining for the first time.
Spencer Ante at the WSJ has previously floated a valuation as high as $500 billion. Business Insider’s Dan Frommer had the number as high as $1 billion. This is the much more reasonable 5X jump from their last round that pegged the company at about $120 million.
The company is growing steadily, but not in the exponential fashion of a social network. It just hit 10 million users and strengthened its partnership with American Express, a combo which the credit card company said had produced, “higher response rate than anything else it was doing.”
The big challenge for Foursquare is that is increasingly competing for the same marketing dollars from small and medium sized businesses as fast growing start-ups like Groupon, and has yet to demonstrate a strong revenue stream despite scoring brand partnerships.
The company is staffing up as fast as it can at expanded offices in New York and San Francisco. It’s working on a merchant platform that it hopes will finally flip the switch on monetization. And all of the money will reportedly go back into building the business, earning Dens and Naveen a congratulatory tweet.
Founders and early investors taking money off the table before building a sustainable business. Who would do such a thing?