Summary:

The much-hyped SXSW app is back with version 2.0 and a new round of funding.

Highlight has reemerged. After spending more than a year at work on the product that wowed SXSW 2012, founder and CEO Paul Davison and his small team have debuted Highlight 2.0 today, along with a $4 million Series A funding round led by new DFJ VC Bubba Murarka.

“When we started, we were creating the Zack Morris cellphone — it’s just barely possible,” Davison said of the first version of his app. “Some of the things we’re seeing, like the iBeacon and activity monitors and services and geofencing APIs. That’s all been in the last years. We’re still in the early days, that’s why we wanted to raise years of capital and keep the team small.”

The round also saw participation from previous investors, including Benchmark, Crunchfund and Sunil Shad. Murarka has also joined the board at Highlight, where Davison said he will bring his past experience working for Google’s Android product and Facebook Home to the app.

Highlight2Davison said that the focuses for 2.0 were the biggest pain points for the original version of Highlight: the app’s actual “intelligence,” its toll on battery life and its overall design. The latest app is intrinsically “smarter” in a variety of ways, balancing data related to how users know each other, where they are, how they are traveling and how much time they spend together. The app will show more information, or bring up an alert when a person hits a certain threshold, and it will also surface new information about that person, like a status update, in the app. He added that the company has worked on weighing different factors more importantly depending on the time of day and location.

“It knows that there are times when you wouldn’t be bothered,” Davison explained. “But it also dynamically adjusts the radius when you’re traveling to find people you know, because it knows you’re in a new place.”

Battery life is arguably the most important issue with Highlight — passive technology means that there’s an even greater drain on resources, and it’s hard to justify keeping an app running if it costs so much energy. In addition to taking advantage of the app’s “brains” to curb unneeded alerts, Davison says that the team was able to shrink background processes to consume only one percent of battery life per hour (though that remains to be seen as the app hits more phones).

The most immediate difference in the new version of Highlight is its two-column, photo-centric layout. Davison said that the team embraced iOS 7 to bring a flatter, card-focused approach and it shows — photos now dominate the incoming feed rather than text, and an interactive 3D map allows users to see where their friends are at different times. Alerts are relegated to a minimalistic header at the top of the feed, and adjust as the user flips through older and older connections. And Highlight 2.0 is mercifully easier on the eyes, as the team nixed the vertigo-inducing logo with one a that looks a little more clean.

“I mean, I made the first design,” Davison said. “Let’s just say I’m happy to have a design team.”

It’s hard to not get wrapped up in Davison’s enthusiasm for Highlight. Where many SXSW wunder-apps fall off the face of the planet after not making it big on the first go-around, it’s clear that Davison is passionate enough to see Highlight through multiple iterations, building on his dream ideal of a location-based “sixth sense” that helps people find each other. He is keen to point out that there is a long journey ahead — quite different from Foursquare’s scramble for usefulness — but there are still so many unknowns about the way mobile technology is evolving that it’s hard to say when (and even if) there will be a “right” time for Highlight to take off.

But Davison remains patient.

“There’s a lot to figure out,” he said. “But if you’re not working on big, hard problems, then what are you doing?”

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