Summary:

There’s a lot of opportunity to be had in building more “boring” security utilities that leverage location. Few companies are doing more in this space than Location Labs, which CEO Tasso Roumeliotis said is on track to be the first big location-based service IPO.

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The location-based service space isn’t just about trendy check-in services. As I wrote about earlier with Life360, there’s opportunity to be had in developing more “boring” security and safety utilities that leverage location to build peace of mind for families. And few companies are doing more in this space than Location Labs, which is building a profitable business that CEO Tasso Roumeliotis said is on track to be the first big location-based service IPO.

The company provides the family locator services for Sprint’s Family Locator, AT&T’s FamilyMap, and FamilyWhere from T-Mobile. Roumeliotis said Location Labs accounted for more paid locations of family members last year than Foursquare did of free check-ins. Location Labs has also struck deals with Sprint and T-Mobile to include its Sparkle Platform on phones, a management tool which prevents driving while texting among other things.

“What people are missing is location has a massive number of use cases beyond just location and checking in and really revolving around mobile personal security, safety and kids,” said Roumeliotis. “They’re huge services at the beginning of their growth.”

Roumeliotis said location services can serve like a personal antivirus protection for families, allowing them to keep track of members and keep them safe. The texting-while-driving technology, which Location Labs has patents on, also has a promising future. Roumeliotis said Location Labs is in talks with five insurance companies who are in pilots that would effectively pay customers to use the service. Additional services built on the same technology could also help parents monitor their children’s phones, restricting how kids use their phones for text messaging, photo sharing, downloading apps and surfing the web.

And all this is turning into a very profitable business. Roumeliotis said Location Labs is helping partners rake in hundreds of millions of dollars in revenue from customers who pay $5 to $15 a month for location services. That helped Location Labs become profitable about a year ago. Roumeliotis wouldn’t share the company’s current revenue rate, but in a blog post earlier this year, the company said it achieved a 200-percent increase in revenue in 2010 with profits growing 700 percent. The company could be ready for an IPO in the next two years, Roumeliotis said.

“Our economic ramp-up is of a public company,” he said. “The space is big and we dominate it.”

Now the company is poised to grow even more as it looks to sign on more international carriers. Roumeliotis said the company is set to announce partnerships later this year with one or two carriers much larger than any U.S. operator. Meanwhile, Location Labs is also growing its location-as-a-service business, helping developers build in location awareness and geo-fencing into their apps.

Location-based services still comprise a growing niche that hasn’t spread to mainstream users. And many still worry about privacy concerns when it comes to location services. It could be some time before many of these flashier services become cash cows. But Location Labs is showing that you don’t have to be hip to make money in location.

Image and thumbnail courtesy Location Labs.

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