Bain Capital Ventures, which pools funds from major tech companies like Intel and Nokia, said Thursday it’s backing Skyhook Wireless in a $6.5-million first round of funding.

Intel

Existing investors Innovent, a unit of Nokia, and CommonAngels, also participated in the round. The investment brings Skyhook’s total funds raised to $8.3 million, including earlier seed capital.

As part of the new financing, Ajay Agarwal, venture partner with Bain Capital Ventures, will join Skyhook’s board of directors.

The Needham, Massachusetts-based company makes a positioning system that lets Wi-Fi devices be easily located.

The technology is seen by many as fundamental to enabling location-based services, like driving directions, targeted advertising, vehicle or asset tracking, as well as social networking applications that could communicate location information to a user’s friends and coworkers.

Unlike traditional systems, such as global positioning, or triangulating a device’s location using cellular tower systems, Skyhook’s software-based system has no line-of-sight requirements, and is accurate to within 20 meters. It can also be used indoors or outdoors to quickly determine the location of a device.

Sprawling Market

Mr. Agarwal was bullish on the company’s prospects, saying that the potential market for the service was enormous.

“We were attracted to the Skyhook positioning approach that relies on industry standard Wi-Fi technology, which is being built into a myriad of devices from laptops to digital cameras to wireless VOIP phones,” he said.

We were attracted to the Skyhook positioning approach that relies on industry standard Wi-Fi technology, which is being built into a myriad of devices from laptops to digital cameras to wireless VOIP phones,” he said.

Scott Darling, vice president of IntelCapital, said his fund has done extensive work on next-generation location technologies through its affiliation with Place Lab, and views its investment in Skyhook as an extension of that effort.

Intel, and views its investment in Skyhook as an extension of that effort.

Ted Morgan, Skyhook’s founder and CEO, noted that the company has already built a network servicing 70 major cities in the United States, and hopes to use the new funding to extend its network to other U.S. cities, as well as roll out in selected metropolitan areas in Europe and Asia.