Enterprise

How Foursquare hopes to hit profitability

Comment

Image Credits:

Foursquare’s business looks a whole lot different than it used to. New CEO Jeff Glueck and co-founder Dennis Crowley know it — and they still have a plan to hit $100 million in revenue, and profitability, in the next few years. They talked about some of their efforts, like focusing on building new tools for businesses that can help them grow, onstage at TechCrunch Disrupt NY.

Previously a service centered around checking into venues, Foursquare has since seen its business shift toward building a suite of developer and enterprise tools on top of its consumer-facing apps. Foursquare’s most recent noteworthy event was its last round of financing — where it raised $45 million, but saw its valuation cleaved roughly in half. And that’s not that surprising: Instead of being valued as a social network, Foursquare looks somewhere between that and a SaaS company, which naturally has a different valuation multiple compared to companies like Facebook or Twitter.

“The business previous was valued on this idea that the Foursquare app would grow up and be a Facebook, Twitter, Snapchat,” co-founder Dennis Crowley said. “What we realized a few years ago was, that wasn’t the destiny of the apps. We don’t need 100 million or 300 million people to use it every day to make a profitable business. We talked to investors, asked, what is this business? What Jeff and I had been working on is how can we build these amazing consumer apps, throw off tons of data. We were working on how we could monetize that data through relationships with developers and enterprises. That’s been working out fantastically well for us. As part of that, we had to reset the expectation to valuation.”

Foursquare has a whole suite of analytics products, with developer tools that power hundreds of thousands of apps. With those tools, Foursquare is able to accomplish a lot of analytical feats, like predicting the number of iPhones Apple would sell in a quarter based on foot traffic, or how well McDonald’s would fare with all-day breakfast. It’s those kinds of tools that will help propel Foursquare’s business forward, Glueck said.

“All these cultural trends, we’re able to capture it, and if you can’t figure out how to build a profitable business with that data, you should probably go home,” Glueck said.

For the most part, Crowley and Glueck were on message for the company, which has faced some challenges as it transitions to a new style of business. But with all that funding, Foursquare plans to not only staff up, but expand internationally. The service works in more than 110 countries, and now plans to further expand into Asia, hiring people to run business development for the country. The hope is that, with all those efforts, Foursquare will be able to hit its $100 million in revenue target and become a sustainable and profitable business.

“We see a direct path to that,” Glueck said. “Part is earning our way to creating a sustainable business to keep investing, in the last two years we built enterprise and media products that grew 160% in revenue last year, they’re a majority of our revenue now. We also know we have investors, we have an obligation to be here for the next 20 years. That balance is a hallmark of what [Crowley] and I have been cooperating on for past two years: build a sustainable business and keep inventing future of how mobile changes the real world.”

If the company were to go back and do it over again, Crowley said they would still split off its original app into two: Foursquare and Swarm. Each serves a different purpose for a different kind of user, with Swarm being more like a game and Foursquare being more of a city guide, Crowley said. But there was confusion around the new products, which led to a dip in usage, Glueck said, but the company has since rebounded. The company tripled checkins per US user in 2015, Glueck said.

As Foursquare’s valuation dips, it naturally becomes a more attractive acquisition target for the right kinds of technology and assets (hint: Foursquare’s treasure trove of data). But Crowley and Glueck’s goal is still to build a sustainable company, the pair said.

“A big part of what we did with this financing is to get it on the road to being a big strong independent company,” Crowley said. “That’s starting to happen, we found a business that works really well, everyone’s really excited about building this stuff, we have those conversations from time to time but a big part of raising the financing is, ‘hey, let’s go and do what we set out to do.’”

Correction: Clarifies Glueck’s statement about check-ins growing since the Swarm split. The company tripled checkins per US user in 2015 after seeing an initial drop following the split. The article previously stated that user check-ins tripled as a result of the split.

More TechCrunch

Founder-market fit is one of the most crucial factors in a startup’s success, and operators (someone involved in the day-to-day operations of a startup) turned founders have an almost unfair advantage…

OpenseedVC, which backs operators in Africa and Europe starting their companies, reaches first close of $10M fund

A Singapore High Court has effectively approved Pine Labs’ request to shift its operations to India.

Pine Labs gets Singapore court approval to shift base to India

The AI Safety Institute, a U.K. body that aims to assess and address risks in AI platforms, has said it will open a second location in San Francisco. 

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

18 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

3 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

3 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies