Posted by: BayAreaComRE | August 19, 2010

San Francisco Adds a Big Name in a Small Hub – Foursquare joins the SF Start-Up Market

The hubs are bustling with start-ups from no name companies to house-hold brands, and we just added a big one to the SF line-up. If you are in social media, even in the slightest, you know Foursquare, and now they have a presence in San Francisco in the San Francisco Chronicle Building at 901 Mission. Social Media is a prodigious industry and the sky is the limit to its growth. We have tracked Foursquare and expected their move to the Bay Area. It is not surprising that Dens and the team chose San Francisco, spearheaded by former Yahoo exec Holger Luedorf and Tristan Walker via NYC.

SF Chronicle Building - Home of Square, gdgt and now Foursquare

Social media and tech start-ups are flocking to SOMA. Its reminiscent of the Dot.com boom, only relative of course (not to embellish too much) our current state of affairs (i.e. the Great Recession!), but the tech and social media industry in the Bay Area is very strong, and once the IPO market  re-emerges, we will see an influx of investments in the industry. Take a look at the latest report by GB Bullhound, which we Scribd below. We have used previous reports by this London and San Francisco based firm, as their coverage on the social media and technology industries accurately grasps the industries’ current scope and future potential.

“Having surpassed email back in July 2009 and exhibiting 32% year on year growth of social networking sites like Facebook are one of the most popular forms of online activity. Current estimations that in the region of 859 million people use social networking websites and 71% of the global online population visited social media sites in March 2010 alone.”

They discuss the impact and relevance of Foursquare and other geolocation companies. “Service’s such as Foursquare and Gowalla are making use of this technology for “geosocial networks” where users are able to connect with their friends and have the ability to post information about their location together with personal comments.”  San Francisco-based “DoubleDutch” uses this technology as well catering to corporations and business.

In a report by William Blair & Company, the value of Foursquare is estimated at $125 million. “Yahoo recently acquired Jakarta’s location-based community Koporl and has been one of several companies believed to be interested in acquiring Foursquare, for nearly $125 million.” The report goes on to discuss the user base of Foursquare. “In conjunction with a major marketing push at SXSW in March 2010, Foursquare increased its user base by close to 50%, from 500,000 users to 750,000, in less than three weeks (now 2.8 million users).”

The Geolocation industry does have an elephant in the room with Facebook, which just released their geolocation service called “Places”. With their 500 million user base, this can make a massive impact.

More social media and tech companies call San Francisco their home. In a recent WSJ article that we posted to our blog, 410 Townsend exemplifies the SoMa market in San Francisco.

Here is an excerpt from the story, “The 75,000-square-foot office building was about 60% vacant in late 2008 when the financial crisis hit and one of the property’s major tenants moved out. Now the landlord, PMI Properties, says the building is 100% full with Internet start-ups such as microblogging service Yammer Inc., online ticket seller Eventbrite Inc., online gaming company Playdom Inc. (recently purchased by Walt Disney Co.) and help-desk software company Zendesk Inc. All of the start-ups moved in within the last year. And many are now bursting at the seams as they grow more quickly than expected.” See the full story, Start-Up Village Emerges in SoMA’s 410 Townsend.

Foursquare’s new location, the SF Chronicle Building, boasts other start-ups beginning in 2009. We found this article that marked the Chronicles efforts to capture this market. “Three technology companies have agreed to lease the lower floors of The Chronicle building, the first steps in a broader plan to create what the developers and city are calling an “innovation incubation hub” in the Mid-Market district. Two of the companies moving into 901 Mission St., Hub Bay Area and TechShop, are “incubators” that will provide space, funding and counseling to startups. Tech companies to move into Chronicle building.

The South Financial District showed 5% less vacancy than the city average, and SoMa’s activity rivals most markets in the Bay Area. Congrats to the Foursquare team to join the ranks of  the major social media companies who call San Francisco home.

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