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.”