by Lorna Li San Jose-based Gaia Interactive raised $12M in Series B Funding, led by DAG Ventures, with return backers Benchmark Captial and Redpoint Ventures. Gaia Interactive is a youth-targeted anime and games site where users can create customizable avatars that they can dress up using Gaia gold earned by browsing, playing games and posting on forums. Participation in the site is free, however Gaia-themed posters, shirts and hats are some ways in which the company has been able to generate revenue. Gaia Interactive’s main business model is to sell advertising. Gaia Interactive was founded by Derek Liu in 2002 as resource website with a linklist. Over the years it moved towards social gaming. In July 2006 Gaia raised an initial round of $8.93M from Benchmark Capital and Redpoint Ventures.