YuMe, a six-year-old company for dynamic insertion of ads in online video announced that it has raised $25 million in additional capital in a round led by Menlo Ventures. Existing YuMe backers, including Accel Partners, Khosla Ventures, BV Capital and DAG Ventures, also participated in the funding.

YuMe matches advertisements to videos on such sites as MSN, MSNBC, IDG Entertainment and Glam Media, across multiple devices like PCs, set-top boxes and mobile phones. The company says it served an average of 30 million in-stream video ads per day in December, and is now profitable.

“Interactive advertising as a whole category is growing and taking share away from older forms of advertising, and video is the largest advertising category of them all,” said Shawn T. Carolan, managing director of Menlo Ventures, who is joining the YuMe board.

Carolan added that large media companies may prefer to do business with an independent ad network like YuMe, rather than Internet giants like Google.

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