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Foursquare turns to debt financing from Silver Lake, venture backers

12 Apr 2013

FoursquareVenture-backed smartphone location software Foursquare has picked up $41m of debt financing from tech-focused private equity firm Silver Lake and the company’s existing venture backers.

The buyout house invested through its Silver Lake Waterman growth debt fund according to a blog post by Foursquare co-founder Dennis Crowley, which said Andreessen Horowitz, O’Reilly AlphaTech Ventures, Spark Capital and Union Square Ventures had provided convertible debt.

Foursquare allows users to ‘check in’ to businesses and locations using smartphones and text messages, giving points and badges when people utilise the service.

The company gained a high profile soon after its 2009 launch but has struggled to turn its popularity into a revenue-generating business.

Andreessen Horowitz and Spark Capital first backed the company in 2011 as part of a $50m financing round, which existing investors O’Reilly and Union Square also took part in.

Startup business typically rely on equity investments rather than debt financing, with the latter tending to ramp up the pressure on businesses to begin earning to repay the debt.

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