Vidyo is the latest company to offer high-definition video conferencing software, and has raised $12 million in a second round of funding.

It joins a number of other companies challenging the entrenched leader in this area, WebEx, recently bought by Cisco. WebEx owns a third of the market, and Microsoft’s Live Meeting owning a little less. However, WebEx costs $39 per seat, leaving it vulnerable to cheaper options. A younger player is DimDim (see our coverage; scroll down), which also lets you upload presentation files.

Vidyo says it has found a new way to encode video, reducing costs. Its based on the H.264 SVC standard. Vidyo says its video quality is better than competitors.

The company recently changed its name from Layered Media to Vidyo.

The round was led by Rho Ventures, and included existing backers Sevin Rosen Funds and Star Ventures. Vidyo will use the new funds to continue building its products and to ramp up marketing efforts.