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JibJab jacks up $7.5 million

Company responsible for those "Elf Yourself" dance videos has raised funding from Sony Pictures Entertainment, Overbrook Entertainment, and Polaris Venture Partners.

A guy I know created an Elf Yourself video of his friends. Um, I'm on the bottom right. OfficeMax/JibJab, user-gen work by Peter Feld

Because we need to ensure that silly do-it-yourself comedy will stay alive during these harrowing financial times, the magic venture capital fairies have infused with a $7.5 million Series C round. And by "magic venture capital fairies" I actually mean Overbrook Entertainment, Sony Pictures Entertainment, and existing investor Polaris Venture Partners.

Founded in 1999 by brothers Gregg and Evan Spiridellis, JibJab started as a hub for funny political song-and-dance videos that the two created, but in 2007 the company began an e-card service called "Starring You!" in which visitors to the site could insert photos of themselves (or their bosses!) into geeky cartoon videos. For the '08 holiday season, JibJab partnered with office supply store OfficeMax for the third annual installment of those "Elf Yourself" greeting cards that I'm sure more than a few of you were sent. (See image for embarrassing example.)

JibJab says a whopping 35 million of its holiday greeting cards were sent across the Web this winter. That's a lot of elves.

JibJab forged a deal with CNN Politics around that time last year when everyone was either thinking about Halloween or the presidential election, launching a zombie politician video creator.

The site has a business model beyond advertising and sponsorship, thank goodness: some of its content is subscription-based, and JibJab also sells additional video. To keep an "Elf Yourself" video past the holidays, for example, you can pay to download it.

"We sensed that customers would pay for access to unique, high-quality entertainment that they could use to express themselves online," co-founder and CEO Gregg Spiridellis said in a release. "With this thesis well proven, and the capital from this financing now in place, we plan to aggressively innovate the online greetings category in the months and years ahead."

Hey, guys, I have a suggestion: recession-themed dance video greeting cards!

This post was updated on Friday at 7:26 a.m. PT to note OfficeMax's creation of "Elf Yourself," which is now presented by JibJab.