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Foursquare will “splutter and fail” and could be sold for less than $50m, claims research firm

  • The prediction suggests that Foursquare’s investors will likely lose out if such a deal were to occur, with the location service having received a total of $71.3m in backing over the years. Alongside these, it updated its product to focus more on recommendations than the ‘gamification’ element, in moves that constantly brought it into greater competition with Facebook.
  • Most recently, it is exploring opening up its user data to businesses.

Foursquare is predicted to “fail” this year and could be sold off for less than USD50m, according to a pessimistic forecast from analysis firm PrivCo. The prediction suggests that Foursquare’s investors will likely lose out if such a deal were to occur, with the location service having received a total of USD71.3m in backing over the years.

PrivCo’s dismal predictions are backed up by reports that Foursquare is struggling to raise new funding at a valuation of more than USD700m since its last round in June 2011, particularly since Facebook’s patchy IPO a month beforehand. The firm is also thought to have made just USD2m in revenue this year from the sale of personalised coupon offers, according to both PrivCo and a separate report in the Wall Street Journal.

“Foursquare is failing to meet its VC investors’ projections – or even its internal plans – quarter after quarter,” says PrivCo. “It has also spluttered in its attempts to turn into a sustainable business and generate any meaningful revenues.”

 

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