Foursquare Buys Placed, Paving Way for More Consolidation

Last night the news broke that Foursquare was buying a major competitor, Placed. Placed had been owned by social network Snap, which acquired it in 2017 for roughly $125 million. Snap either couldn’t figure out how to fully benefit from the acquisition or decided it no longer needed Placed.

The value of the Foursquare deal wasn’t disclosed but other information revealed that it was less than a new $150 million infusion into Foursquare led by The Raine Group. Placed founder and CEO David Shim will become part of Foursquare’s executive team and the remainder of Placed’s staff will join Foursquare.

Foursquare began life as a social-media check-in app and later pivoted to become a Yelp competitor. It then shifted to B2B location data and attribution in roughly 2016, as its growth on the consumer side flattened. Its consumer apps, Foursquare and Swarm still exist, but serve now primarily as a source of first party data for the measurement business. Placed also brings first party data to Foursquare, which is significant.

Foursquare’s attribution and location-data measurement business will be folded into Placed, which will be rebranded as Placed powered by Foursquare. Beyond consumer and attribution, Foursquare has other lines of businesses:

  • Developer Tools, to build smarter apps and customer engagement, using geo-context
  • Analytics, including consumer insights for planning
  • Audiences, so businesses can reach the right consumer segments for their message

It also has a media/ads business called Pinpoint, which the company intends to expand. Many location data/intelligence companies have been getting out of media and focusing on insights and attribution because it’s very difficult for them to compete with Google and Facebook.

Foursquare says the Placed acquisition will help it become “the world’s most trusted, independent location technology platform.” I would say that the acquisition immediately raises the profile of the company, gives it hundreds of new customer relationships and added revenue. The combined entity will have “more than 1,000 clients” and had “more than $100 million in location data and analytics revenue” during the previous year, according to Foursquare’s public statements.

Foursquare will also make the claim that its data are now the most comprehensive and accurate of any competitor in the space. Whether or not that’s true, the acquisition will likely:

  • Make Foursquare the de facto leader in offline attribution
  • Boost the visibility of location intelligence throughout the industry
  • Put pressure on other companies to respond in one form or another
  • Trigger more consolidation: the market doesn’t have room for 20 companies making the same claims

Most transactions happen in the real world (trillions vs. billions in e-commerce). Brands and marketers that aren’t tracking the impact of of their ad spend (whether traditional or digital) on offline store visits and purchases are not getting a clear picture of “what’s working” — or not. More broadly, companies not working with this data are going to lose to competitors that are making smart use of it for media buying but also for audience insights and business decision-making.

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