US startup Zvents, a site that allows users to search for events in their local area, has announced that it has raised $7 million in venture capital.

This has raised eyebrows in E-consultancy Towers, as it is a large sum of money for a site which currently covers only a small geographical area, and has established competitors in the market, such as, Meetup and Upcoming

Zvents was founded in March 2005 by Ethan Stock and Tyler Kovacs, and developed the Zvents Media Platform, a product that provides local search and targeted advertising capabilities for local web publishers.

The site gets a share of the advertising revenue that runs beside the event listings and has formed partnerships with news organisations in the US, including the Miami Herald and Denver Post. Reminds us of what is doing with Big Media publishers – a smart strategy.

But $7m? That sounds like big bucks to our ears. We’re curious to know what sort of equity that buys you, in order to value Zvents.

The $7 million was raised in a fund of funding led by VantagePoint Venture Partners. These investors will be counting on the growth of the local, niche search market in order to see a return on this investment.

VantagePoint MD Davis Carlick is confident this will be the case: 

“Local is a huge growth area on the Internet today, for both relevant content and targeted advertisings. Zvents’ search, content, and advertising solutions are enormously valuable to media firms looking for ways to become more relevant to their audience, and better monetise their content.”

The good news for Zvents is that local search seems to be catching on. Market research firm Kelsey Group is predicting that local online advertising spend will double by 2010, to $13 billion.

Also, Upcoming was bought last year by Yahoo. The fee was undisclosed.