Foursquare, a pioneering location app, is checking in a new CEO and announced a $45 million round of funding that reportedly cuts the New York City company's valuation in half. Dennis Crowley, Foursquare's charismatic founder and CEO, is stepping aside to become executive chairman, while Chief Operating Officer Jeff Glueck will soon be crowned CEO.
With the title change, Crowley will be freed from day-to-day operations from the company and will instead be able to execute on the product, while Glueck will be charged with scaling the business as it pivots away from its consumer roots to enterprise. In addition to those moves, Chief Revenue Officer Steven Rosenblatt will become president, the New York Times reported.
Foursquare was the first location-based app to really take advantage of the iPhone's location features, allowing users to "check in" at locations and become "mayors." The app caught fire at the South By Southwest (SXSW) festival in Austin 2009 and Foursquare took a place among other nascent social apps that were looking for a business model at the time, including Facebook and Twitter.
But while Facebook and Twitter took off, Foursquare struggled. The startup has never divulged user statistics and several years later split its service into two apps: one for checking in, Swarm, and another for finding recommendations, Foursquare. Confusion around that move may have caused some users to jump ship, but no doubt so did the check-in function on other social networks like Facebook. Foursquare said the split was made to improve the user experience, but also a move to diversify revenue sources from advertising to selling data.
Unlike when both Twitter CEO Jack Dorsey and former CEO Ev Williams were ousted early-on, Foursquare's backers have stuck by Crowley. Now Crowley says he feels great about his new role: “It feels amazing,” he told Business Insider.
— Dennis Crowley (@dens) January 14, 2016
"My new job is to make sure those things get built as projects and that the best of them get pushed into the real world as products," Crowley wrote in a blog post on Medium. "Foursquare is in great hands with both Jeff and Steven at the helm and our company is fantastically set up for success."
— Jeff Glueck (@JeffGlueck) January 14, 2016
Indeed, it is impressive that his company was able to secure another $45 million in venture capital funding given how long the company has searched for a scalable business model. The Series E round was led by original investors Union Square Ventures and also included Spark Capital, Andreessen Horowitz, DFJ Growth and Morgan Stanley. Back in 2013, Foursquare raised $41 million in debt financing.
Union Square Ventures partner Fred Wilson, a leading investor in Twitter and Etsy, has been a longtime champion of the company. “One of the things I admire most in companies and their leaders is tenacity,” Wilson wrote in a blog post on Thursday.
“Maybe no USV portfolio company (with the exception of Twitter) has taken it on the chin more for being the 'hot company that fell out of favor.' And yet sitting here today, Foursquare has built a very real business that is growing nicely and has a very bright future,” Wilson continued.
That future includes a shift to being an enterprise platform and not just a daily consumer product. Foursquare is after scaling, for more users and more revenue. Crowley attributed that desire to why the executive shake-up has occurred. "I believe it’s important for Foursquare to be run by executives who have previous experience scaling companies," he told the New York Times.
The efforts will now be overseen by Glueck. Prior to his role at Foursquare, he worked as a CEO at Skyfire, a software company, and the chief marketing officer at Travelocity. The funding round was overseen by Albert Wenger at Union Square Ventures who will be joining Foursquare's board.