Y Combinator graduate OwnLocal is fighting for the little guy: the local news.  Specifically, the startup offers a suite of products to help local news organizations build up their online revenues, and the company has attracted some suitors.  OwnLocal announced Wednesday that it has raised a round of funding led by Wordpress developer Automattic, bringing the startup’s total raised to $2 million.  The company did not disclose how much capital the new round included.

Other participants in the round include 500 Startups, founder of Homestead Technologies Justin Kitch, and several angel investors.  OwnLocal also raised funds from Baseline Ventures and is one of the first for-profit entities to receive early stage financing from the Knight Enterprise Fund, the newly formed $10 million fund for media innovation created by the journalism and media non-profit organization The John S. and James L. Knight Foundation.

Launched in October 2010, OwnLocal aims to help local media organizations increase their revenue through the use of products that help them build professional websites, convert print ads to digital ads, create and manage daily deals, and more.  OwnLocal has worked with over 100 news sources who have seen an average revenue increase of $60,000 within two weeks of using OwnLocal.

Currently, OwnLocal is serving news organizations in 35 states, reaching some one million people.  CEO Lloyd Armbrust told me that the company agrees to a 50/50 revenue share with its customers and has been growing revenue at a rate of 17.5% each month.

And its customers are literally in love with the service OwnLocal provides.  One—the Norfolk Daily News—even made OwnLocal a mixtape.

“OwnLocal allows even the smallest local media outlets and their advertisers to use online technologies to increase revenue,” said Ben Wirz, director of business consulting with Knight Foundation, in a statement. “Backing innovation that helps news providers adapt to the digital age is a key goal for our new Knight Enterprise Fund.”

Previous investors in OwnLocal include Lerer Ventures, Gmail creator Paul Beccheit, Delicious creator Joshua Schachter, and Alex Moore of Anduin Ventures.

The company plans to use the new funds to expand its market reach and beef up its service offerings.