Foursquare Looks for More Cash, but High Valuation a ‘Stretch’: WSJ
However, the high valuation is a “stretch” as for now, Foursquare pulls in little revenue, the Journal said. Currently, the company is valued at US$100 million, the Journal said.
CEO Dennis Crowley is hoping to raise between US$20 million to US$40 million by early June, but his company’s “nascent business model” and competitors like Groupon and LivingSocial are making things harder for the location-based social network, the Journal reports.
Foursquare so far has managed to sketch out a model as a means for generating revenue: a merchant program for local retailers to offer coupons or deals, the Journal said. The social network says it has 250,000 businesses already on the program.
But as that business model is increasingly being saturated—big players like Google and Facebook are themselves about to launch their own equivalents—Foursquare will find it a challenge to leverage on its early start in the location-based game.