Foursquare, which just raised $US41 million in debt a few months ago, is in serious talks with Microsoft about a strategic investment, Bloomberg reports.
An initial Bloomberg report said Foursquare was in talks with multiple large companies, but now Microsoft has been singled out.
Microsoft is known for making investments in big data companies. It invested in Klout, a social influence company, at a valuation worth a few hundred million dollars.
Foursquare, like Klout, is getting a ton of action on its API, which is used by popular apps like Instagram and Path. A spokesperson for the company says Foursquare’s API is pinged 100 million times per day (for comparison, Klout’s is pinged more than 1 billion times per day). Foursquare uses that information, paired with its 6 billion check-ins, to analyse information about various venues in real-time.
What might Foursquare’s future hold from an exit standpoint?
The company may not look enticing from a user acquisition standpoint, i.e. the reason Yahoo bought Tumblr. Foursquare’s app seems to be stuck in the 30-35 million registered user range. But from a data perspective, Foursquare could make a compelling acquisition someday.
Waze was just acquired by Google for $US1 billion despite only having 40 million users. The thinking was that the data Waze collects — real-time traffic information — is a powerful compliment to a product like Google Maps. Foursquare’s location data, both from its check-ins, its web searches, and its API partners, could make a lot of location-based products better.
The Foursquare-Microsoft talks might have kicked off when the two companies partnered on a Windows 8 app in June. Microsoft has been struggling to add a cool-factor to Windows 8, so Foursquare was a good get for the company.
Foursquare has not responded to a request for comment about the strategic investment report.
Microsoft’s talks with Foursquare about a strategic investment are said to be at an advanced stage.
— Dina Bass (@dinabass) August 29, 2013