'Facebook-For-Phones' Loopt Raising Money With Allen & Co.

Mobile social networking startup Loopt is looking for funding.

TechCrunch reported Tuesday that Loopt has hired Allen & Co. to represent them “in a sale or financing transaction.” TechCrunch’s sources say they’re “pitching Loopt at a $500+ million valuation.” We don’t know how accurate that estimate is.

We understand that Loopt is in the early stages of raising money with Allen, but don’t have more details. Loopt has raised $13.3 million so far from Sequoia Capital and New Enterprise Associates.

What is Loopt? A location-based social networking service for mobile phones, including Apple’s (AAPL) iPhone, where it’s currently the 22nd most popular free download.

The idea is that if mobile is eventually as big as many people think it could be, and Loopt is able to connect people on their phones the way MySpace and Facebook do on the Web, Loopt could be worth a lot of money. (The company makes money by charging a monthly fee for its service on every phone but the iPhone, where some versions of its software include ads.)

Loopt’s goal: Building a big, relevant user base, fast. Specifically, we wonder if Loopt can grow in size (and utility) fast enough to matter once Facebook or MySpace add location-based features to their services.

Or can it keep building unique features — like the neat but not-quite-there-yet “Mix” quasi-voyeurism feature on the iPhone, where your “real” social network doesn’t matter?

See Also:
iPhone App Store’s Brutal Reality: Get Viral Or Don’t Quit Your Day Job
Who’s On Buzzy Facebook-For-Mobile Upstart Loopt? A Bunch Of Dudes, Of Course
Location-Based Mobile Social Networking: A $3.3 Billion Market In 5 Years?

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