IPhone dining guide Ness nabs $15M to expand beyond restaurants

The Silicon Valley makers of iPhone application Ness have received a five-star review from investors. The company closed a $15 million round led by SingTel Innov8, the venture arm of Singapore Telecommunications.

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Founded in 2009, Ness Computing intends to help people discover places. The startup released Ness for iPhone one year ago, and the application pivots around a “likeness” score that predicts how much a customer will like a restaurant, using a 0 to 100 percent scoring system. Users leave bite-sized reviews in the form of one to five-star ratings, and Ness combines those ratings with social data from Foursquare and Facebook to perfect its score.

Ness ultimately wants to tell you more than where to just grab a bite or pick up a cup of coffee; it wants to show you what to do, see, and buy. American Express, existing investors Khosla Ventures and Alsop Louie Partners, and an affiliate of the LeFrak Organization participated in the startup’s latest round, which Ness will use to develop into more of a personal shopping tool for mobile.

The three-year-old company, which competes with Yelp and Foursquare, has the multimillion-dollar confidence of investors because the algorithms used in Ness’s search and recommendations engines can be applied to areas such as bars, nightlife, travel, movies, music, shopping, and beyond, Ness cofounder Corey Reese said.

“The risk area that we’ve mitigated … was that core technology development,” Reese said, comparing the sophistication of his company’s search technologies to those employed by Google, Amazon, and Apple.

But a startup that’s hesitant to share the size of its active user base, as is this case with Ness, is not one that typically instills confidence in its health (at least for this reporter). Reese insisted, however, that Ness intentionally chose not to focus on user growth and opted instead to improve the technology powering the application.

“We’re using this next round of financing to focus on growing the user base and getting out into these additional categories,” he said. “We spent a lot of time improving our recommendation technology, developing our own new algorithms … and we’ve been generating a tremendous amount of data from our users.”

On the data front, Ness users have contributed more than 3 million ratings to the system since the iPhone application’s release last August. On average, people generate 17 ratings the first time they start using Ness, Reese said.

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In addition to going after users, Ness will apply its fresh $15 million in financing to move into the new verticals mentioned above, piece together even more signals from channels such as Twitter and credit card transactions to perfect the scoring algorithm, and continue to focus on product craftsmanship, Reese said. The startup also hopes to release an application for Android by early next year.

Ness Computing has raised $20 million in total funding to date.

Photo credit: christian.senger/Flickr