Foursquare, the check-in and local search app maker, is reported to be attracting interest from Microsoft and America Express, who are vying for a stake in the company, reports Bloomberg.
Sources said the software giant and credit card company are competing to acquire a stake in the app maker, rather than cooperating in a joint bid. Foursquare is also talking to other companies about potential investment, the sources added.
The success of Foursquare’s new advertising approach, which allows brands to target users once they have checked into a location, is understood to have spurred interest from investors.
According to reports, Foursquare generated $2 million in revenue in 2012 but ads on its search engine, its main source of revenue, had previously disappointed.
Another option being examined by the app maker is to turn convertible debt holdings into equity. Foursquare raised $41 million in debt in April, which allowed it to delay a valuation of the company as it continues to develop its business model.
Microsoft has invested in other social and mobile start-ups, including Facebook in 2007, but has generally lagged behind its competitors in this area.
The interest from American Express is believed to stem from a desire to tie marketing and loyalty schemes to social media sites. It currently offers discount to users who check-in to shops and restaurants and pay their bill using an Amex card.
Fellow payment companies MasterCard and Visa allow users to transfer offers from Foursquare to their payment cards, meaning deals kick in when they pay for goods or services.