Reading the press on this, there is one thing that is glaringly absent: any numbers around growth. They quote a bunch of numbers that are sums of things since inception of the company: how many checkins total, how many businesses 'using foursquare' (they don't define what 'using foursquare' means, which implies it's something trivial and misleading).<p>The title of the press release is "Continuing Foursquare’s Growth"! Growth is obviously what they want to make you think is happening, unfortunately they have no growth to show.<p><a href="http://www.google.com/trends/explore#q=foursquare%2C%20pinterest&cmpt=q" rel="nofollow">http://www.google.com/trends/explore#q=foursquare%2C%20pinte...</a><p>Foursquare has no growth since 2011 and no way to generate significant revenue. If the numbers they quote on the press release are true, they would have so much cash rolling in that they would laugh at the idea of raising more money. The press release is intentionally misleading; this company is dying.
I'm honestly quite surprised they got that much, seeing as they haven't really had any "huge" innovation or evolution since their original product. They have definitely improved some UI/UX on the app, but nothing ground breaking, to me. Don't get me wrong, I'm a fan of Foursquare but they are getting harder to "keep loving" when they simply can't seem to hit their full potential.<p>I only use the service now if a location has a check-in special of some sorts. And to get those specials, you need more adaption from local businesses and I think that is where they are failing. I live in a big city, and I think I maybe see one new business a MONTH (at most) that actually utilizes Foursquare, and majority of the time it's just a big chain type store. They need to get a team together to pitch to the smaller indie type shops to get them on board to get users interested again. I'm also in the midwest, so maybe they are better in bigger coast cities?<p>EDIT (<i>additional thoughts</i>): I think they also won the hearts of their original users with the app "game-ification" which was incredible (at the time), but I think they need more than that now-a-days. It seems like <i>every</i> new app has "badges", "awards", etc. While it's good that Foursquare was one of the originals by doing that in a social setting, it's irrelevant now because so many businesses are doing it better than them. Just because you created the first wheel, doesn't automatically make you the best, and I think they are forgetting that and not thinking outside of the box of how to make their app more social and connect users like it originally had.
I have no idea how they managed to pull that off since foursquare has so little usage today. If I look back a year or more ago, I had tons of friends using foursquare. Now? None.<p>I am guessing the loan from silver lake makes up 80% of the round and gives them top preference on a liquidity event as well as a 3-5x preference and maybe even monthly interest payments.<p>As for the convertible debt, I would guess it is likely that comes with a major, major discount on the next financing. That would also means that unless foursquare can completely turn its ass around, it would be super unattractive for any new investor to come in. So it goes without saying that the convertible would also have a short fuse of 48 months or less, which would convert at a some crazy low valuation if they did not raise another round.<p>If I was in charge over there, I would be thinking very heavily about what is best for my shareholders to get value and that would almost certainly be some form of a exit. However its not known if any suitors would be interested in foursquare at this point.
It always bothered me whenever Groupon and Living Social were referred to as "social commerce" companies. Buying coupons is <i>not</i> a social activity (i.e. by sharing you're basically announcing to the world that you are a cheapskate who won't pay full price).<p>On the other hand, with their recent iOS upgrade, Foursquare may be in position to become the first true "(offline) social commerce" company. I've used their "Explore" function in the past and had a good experience - There's something comforting about the fact that I'm going to a bar or restaurant that's been "vetted" by one of my friends.
People talking about usage being down are missing the bigger opportunity. Pretty much every app that needs location data uses FourSquare these days. I think that's the bigger vision here. Not exactly sure how it's monetized, but I see the opportunity.
I hope this opens people's eyes about venture debt. A much cheaper alternative compared to preferred stock - the traditional VC go to. Venture debt is attractive to investors at the right stage, especially with traditional yields at an all time low. Just look at the investment history of firms like Square1, Comerica, SVB, and Gold Hill Capital.
I don't see the logic of raising $41M for a company that doesn't need it to buy equipment, raw material, real estate or physical stock of something.<p>Unless your revenue model is to do 5 rounds of financing and then move on to the next startup.
Coming from someone outside of NYC/SF: Foursquare has hit the masses and I have friends/family who have just discovered the app.
It takes a surprisingly long time for new concepts to implement to non early adopters.
So even while it may not be "trendy" in the SF area the app is pulling in a lot more "regular" people now.
Not sure where most of the commenters are from but I completely disagree with the notion of "no one is using or joining Foursquare." I'm a college student in Hoboken, NJ (just outside of Manhattan). Everyone's jumping on board here - but that's just my general demographic.
I love my <a href="http://untappd.com" rel="nofollow">http://untappd.com</a> and the integration with FourSquare makes me think there's a lot of potential using their API (or location data in general) to add location-awareness to an "social" application. I'm sure it's difficult to monetize that, but it's a ton of value.
I find it interesting that companies like Twitter and Instagram were very focused on location initially (due to their founders interest in location) but have more or less have moved away entirely.<p>Whereas big companies that stuck it out with location - 4sq, gowalla, highlight, loopt, etc seem to struggle reaching a similar scale.
One of my biggest challenges as an entrepreneur is I just can't take the plunge to start a business with no way of making revenue. Even though I can see all around me that that (once again) is how riches are made.
Can someone change the title? From the article:<p><pre><code> Update: Earlier I’d described this as a
Series D, but as this is based on debt
and not new shares I’ve changed the wording.</code></pre>