Swoopo, an online auction site that claims to offer great deals and high entertainment value, has raised $10 million from August Capital.

The company is headquartered in Cupertino, Calif. and has a rather different approach to auctions. Instead of presenting a free-form bidding environment like eBay, Swoopo follows a very specific procedure — every item starts at 15 cents, and each bid increases both the price (in 15-cent increments) and, if you’re coming down to the wire, the time left to bid (by 20 seconds). Oh, and you have to pay 75 cents for each of those bids.

This model was criticized as being rather scam-like on various sites because you can end up spending lots of money on bidding fees without actually buying (or “winning”) anything. But Howard Hartenbaum, a general partner at August, says the fees ensure people are serious about their bids. That, combined with the potential for snagging devices like the Ninetendo DS and Amazon’s Kindle for very low prices, gives Swoopo an exciting feeling, more akin to a live auction than eBay, he says.

“My opinion of the U.S. market is, we have a big retailer called Amazon, and we have eBay, but we don’t have any kind of place to be entertained while shopping,” Hartenbaum says.

I have to admit, the idea of “entertainment shopping” isn’t one I get too excited about, but when I recall the number of people I know who get excited about deal-hunting, it’s obvious that I’m in the minority here. Swoopo says it has already built an audience of 2 million registered users in Germany, the United Kingdom, Austria, Spain and the United States. It previously raised $4 million from Wellington Partners.