Foursquare founder Dennis Crowley spent this afternoon in Barcelona, explaining his location company’s potential to Mobile World Conference attendees. Someone else didn’t need to hear the presentation, though. Existing investor Spark Capital is buying $50 million worth of its stock, according to sources, in a deal to provide at least some employees with liquidity.
The result is a valuation north of of the already-impressive $600 million from its last round, I’ve heard. This is even though the company continues to focus on product development instead of trying to maximize revenue.
So what’s making investors excited? Well, the location app appears to be doing a lot of things right, despite the questions some have asked about its still-nascent business model. While Foursquare might not be the biggest social network in the world, the data it does have, and the ecosystem that is growing around it, makes for a promising story.
“Everyone thinks of Foursquare as check-ins and badges,” Crowley said at the conference today. “No, no. We’re recycling data and making recommendations for the real world.”
One example of what Crowley’s talking about here involves Foursquare’s new “Explore” feature, which recently arrived in the company’s mobile applications. Essentially a local recommendations guide, Foursquare Explore allows users to discover nearby restaurants, bars, coffee shops, nightlife spots, and other venues, either by category, name, or even something more specific, like “sushi” or “hamburgers.” The feature taps into Foursquare’s own social graph in order to recommend places your friends have visited and liked, while also providing tips and comments from Foursquare’s wider network. Initially, Explore was limited to making recommendations around your exact location, but with the most recent update, it now allows you to find recommended places anywhere in the world either by moving the map around on the screen or by typing in an exact location.
To date, Foursquare’s 15 million registered users have checked in 1.5 billion times, which in turn has generated rich information about some 750,000 restaurants and other venues. The company is working on creating visualizations of this data on any map, so users can see places nearby that they might want to go.
For businesses, it can break down visitor demographics for individual stores, letting them better tailor their wares to their customers. And, it’s of course also been busy running its coupons via its American Express deal from last year. And for developers, it can provide data via its API, which is already used by popular mobile applications like Instagram and Path.
However, the company only says that “we can’t comment on funding matters.”
And a closing note: TechCrunch writer Ingrid Lunden did an interview with Crowley at MWC today (which is not how we got this story), and she’ll be following this up with another post once she gets off the plane back to London.