PE firms invest a further $40m in 'Chinese YouTube'

Youku expects to close another $40m funding round from new investors in the next six months.

Beijing-based video website Youku.com has completed a $40 million Series E funding round with existing private equity investors, bringing its total funding raised to $110 million over three years.

Shanghai-headquartered Chengwei Ventures led the round and was joined by Brookside Capital, the public equity investment arm of Bain Capital; Dallas- and New York-based Maverick Capital; and Palo Alto-headquartered Sutter Hill Ventures.

No details of the breakdown in financing or equity stakes held by the various firms have been disclosed.

Youku anticipates closing a further $40 million of growth capital from new investors in the first half of 2010, Dele Lei, the company’s CFO and senior vice president, told sister news site PEI Asia.

The company was launched exactly three years ago and has been dubbed the “Chinese YouTube”. Founder and CEO Victor Koo said in a statement that this latest round of financing would be used to “syndicate professional media and produce web-based content”, improve user experience and fund research and development.

Chengwei Ventures, Brookside Capital, Maverick Capital and Sutter Hill Ventures last invested in the company in June 2008, alongside San Francisco-headquartered Farallon Capital, committing $30 million in Series D funding. At the same time, the company secured a $10 million equipment loan from venture debt financing firm Western Technology Investment. Prior to that, Youku received three rounds of funding totalling $40 million.

According to the Youku statement, the website saw a total of 206 million unique visitors in October this year. Youku users spent a total of 229 million hours on the website in the same month, the statement added.

The Youku financing round follows on the heels of a much larger investment into a Chinese internet-focused company; the $180 million financing round secured by New-Wave Investment Holdings, a major shareholder in web-based service provider SINA, at the end of November. CITIC Capital, FountainVest Partners and Sequoia Capital China were part of a consortium of investors that committed indirectly to NASDAQ-listed SINA, sometimes referred to as the Yahoo of China.