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piczo.bmpPiczo, the social networking company that tries to distinguish itself as the safer place for teens, has raised $11 million in a third round of funding, it tells VentureBeat.

Piczo is one of handful of sites gunning for “second place” behind MySpace, the overwhelming leader with 65 million unique users a month. Facebook is around 17 million. Piczo boasts 10.5 million monthly unique visitors worldwide, mainly in Europe and the U.S. Bebo and Hi5 are around that. Like other networking sites, Piczo offers video, photo-sharing, and other communication tools. However, it doesn’t allow people to search profiles, creating more of a sense of security for young people. It’s also invite-only.

The round was led by U.S. Venture Partners (USVP) and Mangrove Capital Partners. Piczo’s existing investors, Sierra Ventures and Catamount Ventures, also participated in the third round of funding.

The company has now raised $18 million since 2005

Chief executive Jeremy Verba tells VentureBeat the company has hit saturation point in the UK, and Canada, but is growing rapidly in Germany, with a million uniques now, up from nothing last summer. Overall, Piczo is adding 30,000 registered users a day, he says.

Piczo is also seeing a lot of overlap with MySpace. MySpace, which is open to search, is like a wide-open “disco,” says Verba. Piczo is like a private party, in comparison — where many of the same people using MySpace go to link privately with their friends, typically ten or 15 people. Another difference is freedom of expression. MySpace keeps users to similarly structured profile templates. Piczo lets users play with their pages more creatively. Its target age group is 13 to 16. Girls make up 70 percent of users.

Verba says there’s no deadline to hit profitability, but there are multiple ways to make money — through advertising and other means. Piczo’s users don’t seem to mind pop-up notes, for example telling them about a Justin Timberlake Piczo page, where they can go and get wallpaper, links to Timberlake’s music videos and pictures and chat with fans. Piczo makes money because Timberlake’s label, Sony BMG sponsors it.