In a rather unsurprising move at this point, Foursquare has finally announced a new funding round of $20M led by Andreessen Horowitz, which now values the startup at roughly $95M. Other investors include Union Square Ventures and O’Reilly AlphaTech Ventures, who backed the company in the beginning with a $1.35M round last fall.
Foursquare currently boasts 1.8M users and is adding roughly 15,000 new users per day. At this rate, the young startup is growing faster than Twitter did at the same stage, which is a big reason Andreessen Horowitz decided to take the plunge- even after previously withdrawing funding after saying the funding process was “playing out too much in public.”
With its new cash infusion, the company — which currently boasts a modest 27 employees — plans to build a “world class engineering organization” to help solidify its position as a leader in the geo-social space. Even though Foursquare gets a bulk of the press these days, it’s easy to forget that other players are busy raising funds and building out their mobile apps as well. Booyah recently raised $20 million for its own MyTown check-in app, and a third player, Gowalla, raised $8.4 million in a funding round in late December.
“Dennis and a lot of other people feel that Foursquare can develop into a major player in the social media space,” Forrester Research analyst Augie Ray said. “But it is going to face a lot of competition in trying to do that. Foursquare is very popular now. We will have to watch to see what’s going to happen in the next year or two.”
In an LA Times article on the subject, an upcoming report from Forrester Research was referenced that states only 4% of adults say they regularly use the services, and 84% say they have not heard of applications for checking in such as Foursquare and Gowalla. The 4% who are users tend to be trendsetters, with 86% of them under the age of 43, Forrester found. This proves an enormous market potential for Foursquare and others in the space to capitalize on. With Twitter and Facebook now entering the check-in race, things could get very interesting.