Foursquare is a data company, not a social network, says its top investor

Foursquare used to be synonymous with check-ins and becoming "mayor" of locations when it launched in 2009.

Seven years later, the social component of checking into a location to let your friends know where you are is just one of the business parts.

Now, its investors are viewing it as a data company.

"Think of it as the new ComScore instead of an Instagram," said Union Square Ventures' Fred Wilson on stage at the Upfront Summit in Los Angeles.

The company has evolved through the last seven years. In 2014, the check-in app broke into two. Foursquare became more of a recommendations engine powered by the data it had amassed, and Swarm became the check-in function. These aren't top of the app store apps, but they're perfectly fine being in the top 500, Wilson said.

"They have two really popular mobile apps that are used by more than 10 million people a month. But really what this business is is taking the data from the tech platform that they built, all that user data, and the venue data that is created and edited by their user base, and providing it as a freemium API to developers," Wilson said.

It wasn't an easy process to get through, and Wilson admitted that it took some time and negotiation to get the company to revalue itself.

"I don't think we could have done the deal that we did a couple years ago," Wilson said at the Upfront Summit.

The company had raised $35 million in funding in 2013 at a reported $650 million valuation, but its latest round in January reportedly knocks its valuation down to $250 million. Despite the adjustment, Wilson continues to admire the tenacity and the data business being built.

"It's a data company powered by two really popular apps," Wilson said.