AdBrite raises $23M to keep up with ad network race

Updated. And, read our Q&A with AdBrite cofounder Philip Kaplan here.

adbrite2.jpgOnline advertising company AdBrite has raised $23 million in a third round of funding from investors led by DAG Ventures and including Sequoia Capital, Mitsui Ventures, and hedge fund Artis Management.

The funding comes as an increasing number of companies are building ad networks, lured by the lucrative buyouts of such companies of late. Microsoft, Yahoo, Google and others are shelling out billions for the best of them. Originally, Adbrite’s specialty was to provide publishers with an ad opening on their page with a simple sentence like “Advertise here for $1,000″ Advertisers, seeing the space, could then call then sign up to advertise there — cutting out the middlemen.

It has since expanded its offerings, to keep up with the fast-moving industry. The company, based in San Francisco, now offers an ad auction system, a full-page ad feature, a branded video player, and playful offerings such as an easy way for regular people to insert ads into online photos. Many of the ideas are masterminded by founder Philip Kaplan, who previously started the gossip site FuckedCompany.com as a forum for dot-come company employees to trade information about layoffs and other bad news during the bursting of the Internet bubble after 2000.

Kaplan says that it’s the third largest ad network, behind Google and Advertising.com, with over one billion page views a day across a network of 50,000 publishers. He says that AdBrite will use the funds to accelerate growth and expand the network’s targeting capabilities, including behavioral targeting.

The latest investment also continues the special relationship between one of Silicon Valley’s top venture firms, Sequoia, and Artis, where a son of one of Sequoia’s partners, Pierre Lamond has worked. The two also backed YouTube together, and several others.

The company previously raised $12 million over the past three years.

We’ll have more shortly (within the hour), but wanted to publish this news immediately since it is beginning to leak out elsewhere.

[Updated: AdBrite has confirmed the funding took place and that DAG Ventures led the round. There were rumors that the deal hadn’t yet closed.]