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After weeks of convoluted negotiations and much-reported brouhaha surrounding Foursquare’s second round of institutional funding, the location-based check-in service now says it has officially closed the round at $20 million dollars. The round was led by Silicon Valley VC firm Andreessen Horowitz, as expected, with previous investors Union Square Ventures and O’Reilly AlphaTech Ventures also taking part.
The hype around Foursquare picked up steam when the company said it was looking for another round of funding, and it was reported that Yahoo and Facebook were both interested in buying the company. Facebook CEO Dennis Crowley (pictured) put the negotiations with investors on hold, which Ben Horowitz from Andreessen Horowitz used as an excuse to very publicly walk away from the table (later proving to be a tactic to secure number one investor spot in the round.) Now, of course, Horowitz says the company naturally invested in Foursquare, citing Crowley as a great founder/CEO, Foursquare’s “killer product” and a “gigantic market.”
A good rule of thumb is that $20 million will last for 18 months, depending on a company’s spending. The Facebook acquisition speculation seemed very interesting, given that the company is planning to enter the location space any time now. Even though Foursquare wasn’t acquired by Facebook or anyone else this time, Andreessen Horowitz’s Marc Andreessen is on Facebook’s board, which means that Foursquare may well end up being in Facebook’s pocket – just for a higher valuation.
Now boasting almost 2 million users, Foursquare closed a first round of institutional funding a year ago at $1.35 million from Union Square Ventures, O’Reilly AlphaTech Ventures and a handful of angels. With this funding, Foursquare’s Crowley says the company will beef up its product team (specifically looking for “great engineers”), work on its core business and move into new offices.
[Photo: See-ming Lee]
Don’t miss MobileBeat 2010, VentureBeat’s conference on the future of mobile. The theme: “The year of the superphone and who will profit.” Now expanded to two days, MobileBeat 2010 will take place on July 12-13 at The Palace Hotel in San Francisco. Register now. Tickets are going quickly. For complete conference details, or to apply for the MobileBeat Startup Competition, click here.