Chute raises $7M and gets its first dose of user-generated advertising

San Francisco startup Chute has raised a second round of institutional funding: $7 million led by Foundry Group with participation from existing investors Freestyle Capital and U.S. Venture Partners.

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It’s also announcing today the advent of Chute Ads, which use “real-time,” user-generated content as commercial fodder for big brands.

Chute, a Y Combinator alumnus company, makes it easier for developers and designers to get high-quality user-generated images into their apps and sites with a cloud-based backend for image uploading, processing, moderation, third-party API integrations, and user authentication, all with a few lines of code.

As for Chute Ads, the company promises potential advertisers quite a bag of tricks: real-time content, user-generated aggregation, voting and moderation, social sharing, and customized displays. End users can upload their content directly to a campaign, comment on it, upvote it, or share it across other networks:

Chute Ads can run as display ad units on any partner site, and clients can create a standalone site of their own to display all the ads (i.e. all the user-generated content for the campaign) in one place.

The startup raised $2.7 million last July. The company was founded in 2011.