Foursquare Gets a Big Check
Foursquare built its brand as a social app for people to check in at locations, compete for badges, and maybe get some discounts at businesses they frequent.
I always found Foursquare silly and never used it except that one time I frantically signed up on my phone at 9:58 p.m. when I was informed I could get free admission to a dance club if I checked-in before 10 p.m.
But lately, unwittingly, I use Foursquare all the time. Whenever I upload a photo to Instagram and tag the location, a little bar pops up that makes it easy by suggesting places nearby and also tells me this feature is “powered by Foursquare.”
Foursquare is an interesting company right now. Its app is still just something that some people use and most people don’t; one that makes the company some money, but apparently not yet nearly enough for it to be worth $760 million, the valuation it received from an investor in 2012, according to The Wall Street Journal. But in raising $41 million in debt financing this week to continue to grow its business, Foursquare is making a bid to become “the location layer of the Internet,” as CEO Dennis Crowley puts it. Foursquare is becoming the platform that developers use for all kinds of apps to allow users to find places nearby or tell their friends where they are. Today, more than 40,000 developers use its API, including Instagram (owned by Facebook), Vine (owned by Twitter), Evernote, Garmin, and Uber.
Continuing in this direction is giving Foursquare a lot more data about the places people visit than it would have as a standalone app. And the more data it has, the more valuable that data is because of the patterns it can reveal about how large groups of people move around and, importantly, where and when they like to spend their money. As I covered in an article today, wireless carriers are trying to build businesses as location data providers as well (see “How Wireless Carriers are Monetizing Your Movements”).
Google and Facebook each have their own platforms for checking in, so the fact that so many prominent apps still use Foursquare is a positive sign for the long-term prospects for the company. Likely, Foursquare’s business plans are just getting started. But the four-year-old company better get moving more quickly.
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