VCs Go Crazy For Foursquare: "Everybody And Their Mother Is Humping Their Leg"

, Peter Kafka is hearing plenty of rumours that, after garnering even more hype at SXSW, Foursquare’s next priority is raising a big funding round.

To be sure, Foursquare hasn’t emerged from SXSW as a clear winner in the location social network space, but it’s still very hot — one VC told Peter that “everybody and their mother is humping their leg” — and its main rival Gowalla has raised over $8 million to Foursquare’s puny $1.35 million Series A round.

Peter hears Foursquare is talking to big West Coast VCs about raising $10 million at a $40 million valuation. He points out that Foursquare still faces a lot of challenges, not only from direct competitors but also from Facebook and Twitter, who are stepping into the location game, and more generally to show that it has appeal beyond hip urban young guys who go out every night.

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