Youku completes $40 million first closing of expansion round

BEIJING, CHINA: On the third anniversary of its launch, Youku.com, China's leading Internet video website, has closed US$40 million in private equity funding in a first tranche of a growth financing round.

The round was led by Chengwei Ventures and the first closing was raised entirely from existing investors. Besides Chengwei, those investors include Brookside (Bain) Capital, Maverick Capital, and Sutter Hill Ventures.

Youku is in active discussion with other potential investors over a second tranche of the round, which will raise up to an additional $40 million.

Including the first tranche for the current round, the company has raised $110 million in private equity funding, and $10 million in venture debt.

This latest round of funding will be used to syndicate professional media and produce Web-based content, to further enhance user experience, and on both PC-based and mobile R&D, according to Youku founder and CEO Victor Koo.

"We are honored to have the continued support of our board and our investors," said Koo. "We feel this is a vote of confidence in our ability to execute and deliver results over the last three years, and this round of funding will help us to extend and solidify our lead in the market," he said.

Youku currently works with over 1500 content license-holders to deliver professionally-produced programming. Youku has attracted 350 brand advertisers to date, and the company's gross revenues for 2009 will surpass RMB 200 million.

"In the year 2009, Youku has cemented a dominant market position and achieved successful monetization," said Eric Li, managing director of Chengwei Ventures. "We will continue to ensure Youku has the strongest financial resources to maintain and expand its leadership position," he added.

Youku had 149 million unique visitors accessing the site from home or office PCs and 57 million accessing from Internet cafes during the month of October 2009, according to Shanghai-based Internet research firm iResearch. iResearch also reported that Youku users spent a total of 229 million hours on the site in October.