Investors are reducing their valuations of location-based check-in and recommendation service Foursquare in the wake of Facebook’s IPO, reports the Wall Street Journal.

Sources at the newspaper say the company is finding it hard to convince investors to shell out to help Foursquare raise US$50 million in funding as use of the free app-based service slows.

Venture capital firm Spark Capital Partners bought U$30 million of stock in Foursquare Labs from employees several months before Facebook’s IPO in May, valuing the company at around US$760 million.

Foursquare claims to have more than 25 million registered users but only 8 million use its app at least once per month.