chumba2Personal electronic devices with Internet connections are all the rage these days. A small, part touch-screen, part stuffed animal called Chumby is hands down the most endearing of these.

Chumby’s parent company, Chumby Industries, announced today a new round of financing to expand the reach of its cute device. Interestingly, the company is also looking to expand beyond the Chumby into other devices that use screen interaction such as digital picture frames and possibly even LCD TVs.

The Chumby uses widgets that are selected online and sent over the Internet to your device. Given that the device looks a bit like a stuffed alarm clock, it should probably be no surprise that clocks are among the most popular widgets. Yet, the Chumby can do so much more. You can check your Gmail from it, cycle through Flickr photos, and see hot items from the social news site Digg. There are dozens of widgets available across a wide range of categories, and the list is constantly growing.

As an early beta tester of the pre-release, I have grown particularly close with my Chumby. When I’m not using it to display the latest Twitter messages, I have the ‘Kane Approves‘ widget (a looped video of Orsen Welles clapping exuberantly, as in Citizen Kane) in constant rotation. Visitors who come into my apartment often remark that such widgets almost turn the device into a piece of art.

The $12.5 million round was led by JK&B Capital. Previous backers Avalon Ventures, Masthead Venture Partners and O’Reilly AlphaTech Ventures also contributed to this round. Marc Sokol of JK&B will join Chumby Industries’ Board of Directors.

Chumby Industries is based out of San Diego, CA.

[photo: flickr/parislemon]