Checking In With Whrrl Mastermind Jeff Holden

Pelago has the distinction of being the first company to raise money in 2008 from the iFund, the Kleiner Perkins fund that backs products that run on the iPhone, iTouch and iPad.

What’s remarkable about that is that the Seattle-based company was initially seeded by individual investors in 2006, a year before Apple’s iPhone was introduced. The company, which raised $500,000 in seed money, then raised a $7.6 million Series A round from Kleiner Perkins, Trilogy Equity Partners and Bezos Expeditions in late 2006. It followed that up with a $15 million Series B round in May 2008 from Deutsch Telecom, Reliance Technology Ventures and DAG Ventures, with the investors from the first round also participating.

All that money is going to support the development of Pelago’s product, Whrrl, a location-based social networking service that allows smartphone users to “check in” to places. The service recently topped 400,000 users.

CEO Jeff Holden (pictured) told me recently that unlike other location-based services, such as Foursquare and Gowalla, Whrrl does more than just tell people your location. “It’s more than just checking in,” he says. “It’s about discovering new places, rating them, sharing observations, meeting up with others. It’s more contextual-based than ordinary check ins.”

I’ve been playing with Foursquare for some time, trying to figure out the value of location-based technology, other than showing everyone in my social network how often I go to Starbucks.

In light of Facebook Places launching last month, I recently chatted with Holden, an veteran, and asked him about the competitive landscape for startups providing location-based technologies.

Q: Facebook launched Places last month. How does having such a big player in the game affect you and all the other location-based service providers?

A: It’s great. It brings a lot of increased attention to what we’re doing. One of the difficult things we’ve had to do is educate people about the check-in process. We’ve had to communicate what it means to check in. Now, that’s no longer the case. People understand what it means. It’s on everybody’s radar. It’s in the mainstream.

Q: But isn’t Facebook a competitor?

A: We view them more as a partner in this. Facebook popularized the status update in which people type text in a box. Check ins are like a structured status update, and Facebook Places is going to help popularize that. And more people are going to see the value in that.

(On a related note: John Kim, vice president of product management at Pelago, said that Whrrl’s service will join Foursquare, Gowalla, Yelp and Booyah as a Facebook Places partner.-Ed.)

Q: What do you mean by that, when you talk about structured data?

A: We’re moving from the unstructured status update to the structured status update. Rather than updating your status by saying where you are, you and your friends and others are going to check into a location, such as a restaurant. Check ins show a heat map of where you are and where your friends are. There’s analysis there in locations. It’s structured data, and it has value. It’s also more social than status updates.

I believe we’ll eventually see this structured check-in data become a commodity as more companies like Foursquare and Gowalla offer location services and other social networking sites, not just Facebook, create open check-in platforms.

Q: Can this be monetized?

A: Yes it can, with the syndication and aggregation of structured data. Look at local advertising and how merchants have traditionally advertised to try to get customers into their doors. There’s a disruption taking place in that model. More and more merchants are finding value in using the structured data from location check ins to reach customers and bring them in.

PE Week subscribers can read the longer version of this story here: Checking In With Jeff Holden.