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Foursquare Borrows A Massive Amount Of Money To Survive
Foursquare is borrowing $41 million from private equity firm Silver Lake and venture capital firms Andreessen Horowitz, Union Square Ventures, O’Reilly AlphaTech Ventures, and Spark Capital.
Silver Lake is leading the debt round. The money from the VC firms is convertible debt.
Bloomberg BusinessWeek's Sarah Frier broke the news this morning.
It reports that Foursquare generated just $2 million in revenues last year.
"This allows us to get closer to being able to prove that there’s a real business here,” CEO Dennis Crowley told Bloomberg BusinessWeek.
Foursquare makes a mobile app for users that want to tell their friends where they are at the moment.
Sources close to Foursquare investors tell us that the company has begun to realize that use case isn't going to scale much more.
So lately, Foursquare has pivoted to also become an app that people can use to find where they would like to go.
That's smart. Yelp has become a nice business doing the same thing.
(There is lots of animus between those two companies, by the way. Yelp board member Keith Rabois, got into a Twitter fight with Crowley a few weeks back.)
Crowley has also taken to calling Foursquare's data the future "location layer" of the Internet.
We're not sure what that means!
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