ScanScout, which matches advertisers and video, closed $7 million in first-round funding from venture capital firm General Catalyst Partners and two angel investors, reports Red Herring.

ScanScout builds software that analyzes video content and serves contextually relevant ads. The ads then appear in a small box on the viewer's computer screen but does not interrupt or interfere with the video being watched.

ScanScout software also returns demographic and geographic information on the user to advertisers, which can be used to deliver still more targeted ads.

The arena for enterprises offering solutions for targeted video ads is growing ever more competitive. Fresh out of its initial funding stage, ScanScout is pitted against players such as YuMe, Adap.tv and others.