Foursquare is struggling to retain the interest of investors. And it’s all Facebook’s fault. At least that’s the claim presented by the Wall Street Journal on Wednesday.
Some social media startups are finding investors a lot less friendly in the wake of Facebook Inc.’s messy initial public offering.
Before Facebook went public in May of 2012, venture capital firm Spark Capital Partners LLC “bought $30 million of Foursquare Labs Inc. stock from the startup’s employees in a deal that valued the four-year-old company at $760 million,” sources tell the WSJ.
Well, what a difference seven months can make. These days, Foursquare is finding it immensely challenging to convince investors that it has retained that degree of value. According to today’s report, Foursquare is presently finding it difficult to pull in as little as $50 million in a new round of funding.
“We are coming off the hype and sliding into the trough,” says Todd Chaffee, general partner at Institutional Venture Partners. “Companies will have to come to the realization that the valuations of the social and mobile boom are starting to fall.”