We’re hearing a lot of chatter that Foursquare is in the process of raising a new fundraising round that will be a down round.
The exact dollar value of what the company is raising, as well as the exact valuation of the round, couldn’t be learned but either way the company is looking at another haircut to its valuation. One source tells us that Microsoft, which participated in a previous financing round, is also looking to participate in its current round.
Still, the fact that Foursquare — once one of New York’s hottest startups — is raising another financing round at a lower valuation than its previous one is significant. Down rounds tend to show both a more conservative interest in the company’s core business, and potentially slowing growth for the startup. That, together, means that Foursquare — a social network reliant on viral growth — may have lost its mojo.
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