Believe it or not, there was a time when people thought Foursquare was going to become the next Facebook, but the company has faded into relative obscurity over the last couple of years, and now it’s worth less than half of what it was just two years ago. Though it doesn’t look like the company is going to die off anytime soon, the $20-$40 million in funding that it’s about to receive will bring its valuation to around $250 million, which means more than half of what it’s valuation is being chopped off.
If ever there was a startup that seemed like a can’t-miss bet to build the next billion-dollar app, it was Foursquare. From the beginning, it was social, local, and mobile, that holy trinity of totem words parodied on Silicon Valley for being a mandatory part of every pitch deck. Its launch at SxSW in 2009 set the bar for a buzzy debut. It had the backing of blue-chip VC firms like Union Square Ventures and Andreessen Horowitz; a pedigreed founder, Dennis Crowley, who had sold his previous startup to Google; and the love of early-adopter types and journalists, the same constituencies that helped make Slack a breakout hit. But early advantages aren’t everything. The New York City-based company is currently in talks to raise a “down” round of funding, one that reduces its valuation–in this case by a considerable degree. According to Re/code, Foursquare will take between $20 million and $40 million at a valuation of $250 million, a haircut of more than 50 percent from the one attached to its last round of funding, in December 2013.
