Foursquare, the fast growing social-networking site, is expanding after receiving a second round of private investment in the form of $20m (£13m) from investors including Andreesseen Horowitz.

Dennis Crowley, co-founder of Foursquare and coverstar of the most recent issue of Wired, says: “Our main priority will be to expand our organisation to supplement the amazing core team we’ve assembled already. We’re hoping to build a world-class engineering organisation, based primarily in our headquarters in the New York City to help us develop the next generation of mobile + social + local products that will excite our users and provide unique value for local merchants.”

The involvement of Andreessen Horowitz is a good sign that Foursquare is destined for bigger things.

Founded just over a year ago, Andreessen Horowtiz is the investment vehicle formed by Marc Andreessen and Ben Horowitz. It’s already invested in Skype and Zynga, which makes games like Farmville.

Marc Andreessen is famous for building the early web browser Mosaic and then co-founding Netscape, but has also been involved in the early stages of business including Digg and Twitter. He also sits on the board of Facebook. Horowitz has an equally strong tech pedigreee or, as Foursquare’s Crowley puts it, they are “legends in Silicon Valley”.

So what’s the big deal about Foursquare? It’s been derided as a service for letting burglars know when a good time is to drop in and rob you, which seems a bit ridiculous (unless you’re friends with a lot of housebreakers?). As someone whose main interaction with the service has been through seeing it pop up on friends’ Twitterfeeds, I didn’t really get it, until someone explained it’s like a game.

Then I read this comment on the Foursquare blog, and it made sense:

“I am thoroughly enjoying Foursquare and I’m in my fifties! It is a kind of game for my sister and me (800 km apart from each other in South Africa) and my brother (in Australia) to visit new places, become mayors, etc. We are having fun AND going out more than we used to AND staying in daily contact with each other through it. Thank you so much!”

So that’s the point for users. For investors and for marketers, Foursquare already has a revenue model (unlike Twitter at the same stage) based on local businesses. It also has partnerships with some pretty high-profile names including Wall Street Journal and Zagat and is reportedly in the process of doing a deal with Starbucks.

Not bad for a business that was based around a kitchen table only a year ago. As Crowley says: “It’s been a crazy year for us and we’re expecting the next 12 months to be even more of an adventure. Look forward to more great product from us soon… we’re really just getting started.”