PixelFish Raises $4 Million To Help Small Businesses Tap Into Web Video

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PixelFish, the online video advertising solution for small businesses, announced today that it has closed a $4 million series B round of funding. The round was led by early-stage venture firm Bullpen Capital, with contributions from returning investors FLOODGATE and Mack Capital, along with newcomers Tomorrow Ventures, 500 Startups and Western Technology Investment.

The latest round of funding adds to the $2.1 million series A round the startup raised back in December of 2010, at which point noted investor and VC Mike Maples joined the startup’s board of directors. The company’s total investment now stands at $7.5 million. PixelFish Founder and CEO John McIntyre said that the infusion of capital will be used to continue to ramp up hiring in its sales and marketing teams.

But what is this ‘PixelFish’, you ask? The startup helps small businesses make more out of video advertising, or, in other words, use video as a customer acquisition and conversion tool. McIntyre said that PixelFish’s real value proposition is in the way it customizes video for the viewer. By taking publicly available information from the Web, be it location data or social graph info, and adding a bit of secret sauce, PixelFish wants to start serving you with ads that make sense for you.

YouTube’s ads are notoriously questionable, and often seem taken from a cookie-cutter formula, so PixelFish has begun working with the video giant to help make their ads a more targeted experience, which will no doubt be music to the ears of both advertisers and consumers.

Back in April, PixelFish acquired Backyard/Citysquares, the Eric Schmidt and Tomorrow Ventures-backed local deal search company, to help refine the technology that enables PixelFish to serve videos that are not only more targeted based on one’s profession or interests, but also location. Targeted local video advertising has a lot of growth potential, and can be valuable to both advertisers and local businesses.

McIntyre said that PixelFish is primarily focused on its partnership with YouTube at the moment, but the startup was successful as one of the early providers of advertising to GoogleTV, and plans to expand its reach in the near future.