Almost all smartphone users have experienced this scenario: After downloading a new application, you are alerted that the application would like to use your location. At this point, you have the choice either allow this behavior to continue, or nip it in the bud.

This is the conundrum that many app makers face, as many users aren’t willing to let the location services operate in the background. For some users, it’s a privacy issue — not wanting people to know where they are at all times. For others, arguably the majority, it is done as a battery-saving measure.

This is a problem for both the app creator and the user. Users don’t get the full value of using location services and app makers miss out on valuable data. PathSense, a startup from Carlsbad, California, wants to solve this problem.

PathSense was created by the team that created Trapster, an app that used crowd-sourced data to alert users to road hazards and speed traps. The team is led by founder and CEO Pete Tenereillo, making it his seventh startup, and includes some former Nokia and Qualcomm employees.

Trapster was one of the most popular navigation apps for a couple years before it was eventually eclipsed by Waze. As the team scaled Trapster, they collected millions of data points everyday. To determine what paths people were taking so they could give relevant info, they had to run GPS in the background of the app.

“What we discovered is the same thing that everybody discovers when they try to run GPS in the background — it burns your battery up,” Tenereillo said. “We had a lot of users complaining and even deleting our app because of battery drain.”

GPS is super accurate but it kills battery life. Network location isn’t accurate enough, even though it doesn’t burn battery. Wi-Fi location is only accurate up to a few hundred yards and it only works in a few scenarios. That’s why they decided to build an SDK to fix the problem for apps that use location services.

“We have two forms of our system. One is entirely contained in the handset, it’s our true GPS replacement,” Tenereillo said. “The other one is a combination of a very thin client that just sends sensor data up to the cloud, and then our cloud-based system which is obviously more lightweight but then requires a connection. Both of them are using the same technology.”

The app combines sensors (gyroscope, accelerometer, magnetometer and more), a proprietary predictive routing engine, and an AI learning engine in a unique way to produce a precision location SDK and both a historical and predictive path engine for users. So, it learns what routes users regularly travel and can predict when they will travel that road again.

The implications for enterprise clients is huge, as it would give them better data for more targeted advertising. For example, Tenereillo said, Yelp could offer a special coupon to a restaurant you regularly pass on a certain day and at a specific time. Tenereillo also noted that using PathSense won’t change the terms of use in any app that might employ their SDK.

Steve Hart, founder of ViaSat and an investor in PathSense, said that he believes the initial market could be very large and there is a good potential for follow-on opportunities.

“Specifically, I think there will be a large market for predictive path information, and the data collected will be very valuable, both to applications that use the API, and to PathSense directly,” Hart said.

Through it’s real-time predictive routing, PathSense can determine all possible routes you could take while you are moving along a specific path. The company also has an API for road geometry and an embeddable navigation system, but they aren’t releasing those just yet. For now, PathSense is heads down on the battery drain API.

The company’s goal is simply to make location apps better. By reducing battery drain, they are hoping they can get more people to opt in to location services on their favorite apps. However, Tenereillo said PathSense is merely an SDK solving the battery issue for other apps. It’s up to the app makers to prove the value of using locations services with its app.

“We are simply an SDK empowering apps like, for example, Facebook,” Tenereillo said. “We don’t have Facebook as a client yet, but Facebook, or Uber, or whoever else to solve their battery drain problem — it’s still on them to provide enough value to the user so that the user clicks ‘always.'”

The company raised $500,000 before attending the DEMO conference in San Jose, where they won a DEMO God award. That money is going towards a $2 million seed round the company is on track to close by early Q1 2015. While things are moving forward for PathSense, there are still some challenges to address.

“The biggest challenge, as with so many similar companies, is achieving enough usage to have a critical mass,” Hart said. “Once enough users are on the system, through the applications that make use of the API, the value of the analytical data will be established and the company will have the scale to support a full range of platforms.”

For Tenereillo, PathSense just a user acquisition problem, though, because they need to work on the tech too. Calibrating sensors, getting the algorithm dialed in, and making sure that it is bug-proof for use with major apps.

PathSense can be integrated into over 500,000 apps on iOS and Android with a few lines of code. Developers who are interested in early access can sign up for the SDK on the PathSense website.