Foursquare, the extremely hot mobile check-in service, has finally raised a new round of funding. Since at least March, venture capital firms (and large internet companies) have been courting Foursquare, which has been growing very rapidly; at one point, Yahoo (NSDQ: YHOO) was said to have offered as much as $100 million for the startup.
Foursquare ultimately went with a consortium of venture capital firms, which are investing $20 million in the company. They include existing backers Union Square Ventures and O’Reilly AlphaTech Ventures, as well as new investor Andreessen Horowitz.
Foursquare says its “main priority” for the new cash will be to build a “world-class engineering organization.” The company, which was founded just over a year ago by Dennis Crowley, who also started and then sold mobile social networking service Dodgeball to Google (NSDQ: GOOG), had raised $1.35 million in a round last fall and currently has 27 employees.
In a blog post, Andreessen Horowitz, which had previously withdrawn a funding offer because it said the funding process was “playing out too much in public” explains its reasoning for backing the company, calling Foursquare’s service “a killer product” that is “growing faster than Twitter did at this stage.”
The VC firm also calls the market opportunity “gigantic” because of the growing adoption of smartphones, saying the service “will capture a huge portion of (the market) because it’s incredibly fun and addicting.”
It’s not alone in the mobile check-in market, however; Booyah recently raised $20 million for its own MyTown check-in app, and a third player, Gowalla, raised $8.4 million in a funding round in late December.