The round was led by Rho Ventures, with original investors Galleon Crossover Fund VantagePoint Venture Partners also participating.
ReachLocal offers a local-focused search marketing product that targets SMBs. ReachLocal offers campaign management for online advertising on major services including Google, Yahoo, Microsoft and AOL, and also provides campaign specific site building and click tracking to customers.
For what is basically a SEM firm, the valuation is staggering; however despite the direct to buyer model of advertising options such as Google Adwords there is a growing market for middle-man services such as ReachLocal. There will be many people in the SEM business who will be re-evaluating their company valuations following ReachLocal's new round of funding, and I'd suggest that many of them may be sitting on a lot more value than they had previously thought.
(in part via LA Times)