Open source adserving company OpenAds has taken on $5m in Series-A funding from a range of VCs to further its challenge to established online ad systems.

The financing round was led by Index Ventures, and also involved First Round Capital, Mangrove Capital Partners and O’Reilly AlphaTech Ventures.

Originally founded by London-based ad network Unanimis, but now a stand-alone entity, OpenAds provides a lower-cost ad serving solution for publishers, allowing them gain more value from ad sales. Some see it becoming a rival to the likes of Yahoo!’s Right Media, AdECN and Doubleclick’s upcoming online ad marketplace.

It says it has 25,000 publishers using the software on 100,000 sites, with connections to around 30 ad networks. 

Writing on his blog, First Round Capital’s Josh Kopelman said:

“What really excites me about OpenAds is that they are in a wonderful position to shrink the adserving market. By removing the adserving costs, publishers can now focus on raising their effective CPM. This is especially important for small and mid-sized publishers, who previously had a limited choice of adserving technologies – and no real ability to impact pricing.”

Scott Switzer, OpenAds’ founder, said the investment would allow it to expand its team and speed up the development of its software:

“Openads will always remain a free, open source adserver. Openads will continue to focus on building features that the community wants, so that we have the simplest, most powerful, and most widespread adserver on the planet.”

OpenAds said the move would see Index’s Bernard Dalle and Saul Klein and Gerard Lopez from Mangrove Capital joining Damon Reeve from Unanimis on its board of directors.