Foursquare Labs Inc. Chief Executive Officer Dennis Crowley is stepping down as the company seeks to restart growth under his successor Jeff Glueck.
Crowley will become executive chairman of the location-services startup he founded, which raised $45 million in the latest equity funding round, he said in an interview Thursday. Glueck replaces him after 18 months as chief operating officer. Steven Rosenblatt, the chief revenue officer hired to help Foursquare boost sales, will become the president and act as Glueck’s “co-pilot,” Crowley said.
After debuting in 2009, Foursquare became a popular tool among mobile users who would “check in” when visiting a place — from restaurants and shops to cities and airports — in order to share their location with other people. While Foursquare seemed perfectly poised to benefit from all the trends — it was social, location-based and mobile — the habit of checking into places lost its novelty with consumers, as many of those features were built into other social apps.
The latest cash infusion gives Foursquare a lower valuation — known as a down round — according to a person familiar with the matter, who asked not to be identified because the talks are private. Re/Code reported in December that the funding round underway at the time valued the company at about $250 million, less than half of what investors thought it was worth two years earlier. Foursquare wouldn’t comment on the report or address the valuation Thursday. In 2013 Foursquare raised $35 million, valuing the company at a little more than $600 million.
“You can say what you will about Foursquare, and don’t bother because it most certainly has already been said and not very nicely, but it has survived and is thriving,” Fred Wilson, a managing partner at lead investor Union Square Ventures, wrote in a blog post. “Very few understand that, but those close to the company do. Which is the hallmark of a tenacious and durable founder and leader and his or her company.”
The round was led by existing investor Union Square Ventures, with participation from others including Morgan Stanley, DFJ, Spark Capital and Andreessen Horowitz, according to Foursquare. Bloomberg LP is an investor in Andreessen Horowitz.
Foursquare plans to hire 30 people for sales, engineering and other departments as part of the plans for its new cash.
Crowley is taking a step back after more than 15 years of pursuing the perfect service to connect people to places through their friends.
“It’s super important for the company to be run by executives with previous experience in scaling and growing,” Crowley said, adding that he will be leading the “vision” and build products that “only Foursquare can build.”
Years before Foursquare appeared to be a breakout success at the 2009 South by Southwest technology conference, Crowley was working on solving the same problem at a startup called Dodgeball, which he co-created and sold to Google in 2005. His leadership of both companies spanned the proliferation of smartphones, the improvement of GPS technology, the growth of Facebook Inc. and Twitter Inc. and the advent of mobile advertising. In 2010 Crowley was often mentioned in the same category as Facebook CEO Mark Zuckerberg.
Because Foursquare didn’t continue to grow, he has been forced to re-position the business model, re-brand its apps and focus instead on the stream of data all those check-ins produced. The data is what Foursquare plans to capitalize on now. It’s more accurate than many mapping technologies, because it has information on people who actually went to places and clicked to confirm their existence and location.
The bulk of Foursquare’s revenue now comes from selling products built on the company’s location data to other businesses, Glueck said in an interview. The three main products help with ad targeting, allow developers to integrate Foursquare’s location data into their own apps and services and provide insights to business owners figuring out location- related problems, such as where to open their next store, he said.
The company captures location data from its own users as well as ingesting information from other applications that were built using Foursquare’s location technology.
“The $45 million will really allow us to take advantage of the demand that’s out there,” Rosenblatt said, adding that Foursquare currently works with one third of Fortune 500 companies. “They’re really excited for us to scale the business we have at hand.”
–With assistance from Selina Wang.
This article was written by Jing Cao and Sarah Frier from Bloomberg and was legally licensed through the NewsCred publisher network.