Foursquare raises $150 million to finance Placed acquisition
Snap (SNAP) has sold its location data business, Placed, to Foursquare, which sells location data and services to brands and other companies. Placed provides location data services, helping brands measure the offline impact of their digital campaigns. Snap bought Placed two years ago for $135.2 million in cash. It did not disclose how much it sold Placed for to Foursquare, but the deal was announced at the same time Foursquare said it received $150 million in additional funding from an investor, The Raine Group. Foursquare said it would use its new windfall to finance the purchase of Placed and other activities.
Placed sale adds to Snap’s war chest
Snap’s sale of Placed seems strategic to the future it wants and creates another opportunity for Snap to replenish its cash reserve. Snap finished the first quarter with $247.5 million in cash, down from $389 million at the end of 2018. Google parent Alphabet (GOOGL), Facebook (FB), and Twitter (TWTR) finished the first quarter sitting on cash reserves of $113.5 billion, $45.2 billion, and $6.5 billion.
With Facebook launching a massive consumer advertising campaign to restore trust in its social media services and Pinterest (PINS) raising ~$1.5 billion through its initial public offering in April to support its expansion, Snap anticipates increased competition in the pursuit of social media users and advertisers, and could be building its war chest in preparation.