Foursquare Courted by Yahoo, Venture Capital Firms

Yahoo is prepared to put down $125 million for the startup

Location services are all the rage right now, at least if you look at the kind of money some are willing to spend on them. Foursquare is the hottest locations service/game/mobile app of the day and, despite still being relatively small, it has under one million users right now, a couple of big venture capital firms want a piece of the action. But Yahoo has also thrown its hat into the ring and is looking to buy the company altogether, prepared to pay up to $125 million for it.

All Things D’s Kara Swisher reports that Yahoo isn’t giving up despite numerous refusals from Foursquare. The company offered $100 million for Foursquare, but founder Dennis Crowley is reluctant to go down this road again after selling his previous company to Google. Yahoo is undeterred, it has upped its offer several times and may be willing to go as far as $125 million. The figure would be pretty impressive if it weren’t for several VC companies offering to finance the startup at a valuation close to that number.

Both Andreessen Horowitz and Khosla Ventures, two big-name venture firms, are said to be interested in the startup and are offering some pretty enticing deals. Foursquare’s reported valuation has been steadily climbing from $70 million, already a huge sum put in perspective, and is now said to be at around $100 million. The last time Foursquare raised funding, in August 2009, the company was valuated at $6 million so it’s understandable why the new figures are pretty impressive.

And Foursquare in not lacking in suitors. While some potential investors have been scarred off by the huge valuation, it looks like others are just now getting interested. Among them is the curios Russian firm Digital Sky Technologies (DST) which made a splash when it invested in Facebook last year, at an impressive $10 billion valuation and later in social games phenomenon Zynga.

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