• by Mark Walsh  @markfwal, October 30, 2007

Vitrue, which creates sponsored video sites for advertisers, has raised $10 million in a second-round venture financing led by Dace Ventures. The company will use the capital infusion to accelerate technology development and expand its sales operation. Previous investors, including Comcast Interactive Capital, Turner Broadcasting and General Catalyst Partners, participated.

Atlanta-based Vitrue develops branded social-networking sites that let consumers create, edit and share videos and other content. Since launching in 2005, the company has created dozens of promotional sites for clients, including Turner Broadcasting, Procter & Gamble, the F/X channel and VH1.

"We're certainly seeing additional interest from brands and media companies and agencies looking to build user-generated content into programming and the fabric of their Web sites," says Reggie Bradford, CEO of Vitrue. With new funding, the company will develop an interface that gives clients greater ability to manage the look and feel of sponsored sites, while Vitrue oversees back-end operations and reporting.

Bradford also plans to expand its sales force from a handful of staffers to an estimated 12. One goal is to encourage clients to extend its ad platform beyond short-lived promotional contests. "We want them to move from creating contests to building communities or regular features on a site," he says.

David Andonian, founder and managing director of Dace Ventures and a former CMGI executive, will join Vitrue's board of directors. The newly formed Dace has more than $70 million under management, and its portfolio houses Internet startups such as auctionPAL, CityVoter and Panraven. Vitrue has raised more than $15 million to date.