Location service Geodelic raises $7 million, readies for big announcements

Geodelic, the Santa Monica, Calif.-based mobile application company specializing in location-based services, has raised $7 million in a Series B funding. The round was led by MK Capital, with previous investors Clearstone Ventures Partners and Shasta Ventures also taking part.

The company is known for what it calls “searchless search,” which means that the Geodelic app (available for the iPhone and Android devices) automatically searches points of interest such as restaurants, retailers, cafés and bars near the user’s location. The application displays the results in a kind of carousel, which can be spun around on the touchscreen to find places of interest nearby and further away. Geodelic is aimed at businesses, who can use the Geodelic platform as a way to approach consumers under their own brand, as opposed to Foursquare-style cobranded campaigns, where the location service shares billing with the marketer.

Geodelic is going to ramp up its business with the new funding. (It raised a $3. 5 million Series A round a year ago.) That means working on its products and hiring aggressively. The company employs about 30 people now, having grown from a team of seven around the first round of funding, and the number is supposed to grow rapidly, says CEO Rahul Sonnad (pictured). And, Sonnad adds, Geodelic is going to announce major partners with big brands (think retailers, airports, hotels, theme parks or so) in the next three months.

Geodelic operates in a hot space – location – but the competition is fierce. As far as consumers go, there are many services to help them find a cup of coffee in a strange city like Yelp, Where, or Google Maps, for that matter. Sonnad says that the company is more about giving tools for brands to communicate with their consumers, rather than going after consumers by itself. While this is by no means an empty arena, as there are players like Socialight and DoubleDutch providing a similar service, Sonnad is confident in his company.

He already has experience from the platform side of things: His previous effort, ThePlatform, purchased by Comcast in 2006, provided a Web video distribution technology that serves as the back end for video distribution for companies like Verizon, Hulu and CBS. Now, he says, the proposition is the same, only with geo-content instead of video.

“Major retail brands like department stores or clothing stores are realizing that they have to connect with their consumers, and they are not going to do it through Google, or Citysearch, or Foursquare,” said Sonnad. “We have seen some brands create their own apps, but we are still completely in the first inning. I think this [location-based services] is going to be mainstream quicker than many think.”

While consumer-facing location-based services like Foursquare, Gowalla and Brightkite seem to be getting a lot of attention from media and, especially in the case of Foursquare, investors, the business-to-business segment seems to be quiet, Sonnad says.

“Yet all the big players like Google, Microsoft, Nokia, AT&T, Verizon are trying to figure how to get more involved in location,” said Sonnad. “I think it is going to be the same kind of mega-market that search was.”

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