Forget the check-in, and show me the check: Foursquare has received new funding of $50 million which reportedly values the company at an eyebrow-raising $600 million. The location-services company will now look to hire more engineers and probably a business-development executive or two as it looks for a way to generate substantial revenue, and maybe even one day profits.
Foursquare announced the new funding in a blog post, saying that “having our current investors double down on us is a tremendous gesture of support for foursquare and for the direction we’re headed.” Andreessen Horowitz led the new round, with current investors O’Reilly Alphatech Ventures and Union Square Ventures also contributing along with newcomer Spark Capital. Techcrunch reported that the new round values the company at $600 million, sure to set off a new round of speculation about big bubbles leading to big troubles that doesn’t involve musing about champagne.
The company, which allows users to announce their presence at an ever-growing number of bars, restaurants, offices, arenas, and public spaces recently passed the 10 million user milestone, and just this week inked a deal with American Express to allow Foursquare users with AmEx cards the opportunity to take advantage of cash-back deals. With only 70 employees, New York-based Foursquare seems set to go on a hiring binge with its new cash hoard, beefing up a San Francisco office that just opened.
It doesn’t appear that Foursquare is going to use any of the new funding to let early employees take some money off the table, which has had those thinking about investing in Groupon shaking their heads as they realized how much early investment went toward rewarding employees. Still, as a result of the new valuation Foursquare will need to find a money-making business model sooner rather than later.