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(Image source: Digital Trends)
BY ELISA LOPEZ AGUADO AND KATIE BRENNAN
Location-based app Foursquare borrowed $41 million Thursday. But is the investment helping
it thrive or simply keeping it going?
“Foursquare isn’t dead yet. It was once called the next Twitter and then perhaps lost
some of its luster. But now, a $41 million infusion into the company to prove it's a
real business.” (Via Bloomberg)
The $41 million comes from tech investor Silver Lake and a handful of other venture capital
firms, plus a private equity firm. But keep in mind, it’s a loan, not cash. PolicyMic
explains why the app took on the debt.
It only brought in $2 million in revenue last year, “a troubling sign for the three-year-old
company.” Also, “negative speculation about the company’s future is not a new
sport, with many concerns that Foursquare's finances actually do not add up.” (Via PolicyMic)
And the funding doesn’t mean investors think Foursquare’s a hit.
An All Things Digital contributor explains “Silver Lake is giving the company a multiplayer
loan and the other investors ... are all buying convertible debt.”
The Wall Street Journal reminds users Foursquare has been trying for months to spur investor
interest. But it’s had a hard time convincing anyone it’s still worth the $760 million
it was valued at in early 2012. Rumors are the company’s worth about $600 million.
Wired claims Foursquare’s reason for existence, “location check-in...seems less relevant,”
but notes “Foursquare’s new focus is clearly on helping you find things to do, right from
the get-go.”
The news about Foursquare’s new investors came Wednesday after the app announced its
latest update.