Foursquare is apparently in discussions with a couple firms with deep pockets about potential capital investments. Bloomberg is citing anonymous people with knowledge of the discussions as its sources in a story.
Foursquare is a free app that lets you check in to show that you're visiting specific places like a coffee shop or a restaurant. The app also offers personalized recommendations and deals based on where you, your friends, and people with your tastes have been. Currently, Foursquare lists Union Square Ventures, O'Reilly AlphaTech Ventures, Andreessen Horowitz, Spark Capital and a handful of angel investors among its supporters.
But there are now talks that and American Express are each showing interest in a strategic investment. According to Fox Business, both Microsoft and American Express view an investment in Foursquare as another way to monetize the growing of social media. Neither company could immediately be reached for comment.
Founded in 2007, Foursquare has some impressive numbers. More than 30 million people worldwide use the app, which has racked up better than 3 billion check-ins. Millions check in every day. More than a million businesses are now using the Merchant Platform.
"I think we've proven our business model," Steven Rosenblatt, Chief Revenue Officer for Foursquare, told Bloomberg. "Our business model is very clear and it's working, doing what we thought it would do, if not more. It's all well ahead of what we anticipated."
Foursquare generates revenue through advertising but has seen competitive pressure from Facebook. Despite its mass popularity, the company reported sales of $2 million in 2012.
Beating Sales Goals
We asked Charles King, principal analyst at Pund-IT, for his take on the chatter. He told us the Foursquare rumors indicate that the company's improved sales -- its CRO says Foursquare is on track to beat its sales goals for 2013 -- is making it attractive to investors beyond risk-taking venture capitalists. And that, he said, suggests that its go-to-market strategy is gaining a foothold.
"From a practical standpoint, cutting a deal with a deep-pocketed partner -- Microsoft and American Express are both said to be interested -- could provide the company the funds it needs to expand development and ramp further sales," King said. "That, in turn, should brighten its outlook and make the company more sustainable from both a business and financial perspective."
Nikhil @ MobileJury.com:
Posted: 2013-09-03 @ 1:06am PT
The Revenue Models should me more from the advertising from many sources. This is a good initiative. Cheers for sharing Jennifer! :-)