More money for the social gaming space, this time, with a musical twist. Online gaming firm Conduit Labs has raised $3 million in a second round of funding, per an SEC filing. The startup raised $5.5. million in funding from Charles River Ventures and Prism VentureWorks in mid-2007, but did not respond to a request for details on the source of the new investment. Updated: CRV Partner Izhar Armony confirmed that the VC firm participated in the new round. Founder and CEO Nabeel Hyatt was formerly an EIR at Prism.

Conduit Labs’ main project is Loudcrowd, a hybrid virtual world, social game based in a nightclub-style environment. Users interact by dancing, flirting and even suggesting tracks for the “DJ’s” playlist. Indie and established artists like Franz Ferdinand seed the game with their tracks, which users can collect and share through a new Facebook widget; they can also buy tracks and gear for their avatars using virtual currency called points.

The company brought in former Universal Music exec Josh Hubball as its VP of business development this spring, to help with brokering better licensing deals with the labels.

• Conduit Labs Receives $5.5 Million First Round For Online Gaming System