Minneapolis-based Zencoder, a start-up that specializes in cloud-based video encoding, said it raised $2 million in funding.

Jon Dahl, the company’s CEO and co-founder, said the money would go toward hiring more employees.

The company currently has a team of nine people, located in Minneapolis, San Francisco and Madison, Wisconsin.

In the short term, the company plans to add four full-time employees in sales and marketing and engineering probably to its San Francisco operations, Dahl said.

“We’re going to use the money to grow and expand,” Dahl said. “Our product is great today … We’re going to keep making it better at the front of the market.”

Is there pressure to move the company to San Francisco?

“We’ll see,” Dahl said. “There’s definitely a good reason to have the company centralized in one place. We think a great start-up can be run in Minneapolis, San Francisco, just about anywhere. As we grow, we may have to face that question (of where to centralize).”

The $2 million in funding was through venture capital and angel investment.

“Zencoder is on top of the enormous market shift presented by the move to the cloud, and applies great technology and vision to the exploding internet video market,” said Ron Conway, founder of SV Angel, an angel fund invested in the company. “They are the right team to lead this revolution.”