Transcoding company RipCode has announced it has raised $12.5 million in its third round of funding, which brings the total raised to $32 million since the end of 2006. The round was led by Granite Ventures with the MD of that fund joining the board of directors, and included existing investors Hunt Ventures, El Dorado Ventures, Vesbridge Partners, and ATA Ventures. RipCode will use the money to expand sales, marketing and product development of its next-generation media conversion technology which allows on-demand and real-time stream transcoding.

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RipCode would have got a boost for its funding round from the deal it signed with MySpace last month, which lets MySpace users stream video to their phone. RipCode’s technology transcodes the video on demand, which eliminates the need to store the entire video library in multiple mobile formats. RipCode’s technology works on the various web platforms as well, but the big opportunity is in the mobile sector. The company recently added the iPhone, T-Mobile G1, RIM (NSDQ: RIMM) Blackberry Bold and Blackberry Storm to its handset line-up.