To investors, Youku.com is Chinese for YouTube.

The No. 1 Chinese video-sharing site on Monday picked up an additional $40 million in funds. The startup grabbed $30 million from private equity investors and a $10 million equipment loan. That comes after $40 million in funding since the company began in 2006.

 The financing underscores investors’ appetite for all things video online and access to China’s over 200 million Internet users.

“With the new funds, we will be deepening our service to users, advertisers and media partners to give them the best and largest platform in China to distribute video content online," Youku.com CEO Victor Koo said in a statement.

Youku.com may be China’s answer to YouTube. But it remains to be seen whether online video sites can attract ad revenue that outweighs high bandwidth and legal costs. So far, Google’s $1.65 billion YouTube acquisition has been followed by endless copyright battles.

Youku.com will likely have fewer legal woes in a country where copyright infringement remains the norm. The People’s Republic of China is notoriously weak on copyright protections, allowing pirated copies of shrink-wrapped Windows software and others to run rampant.

Full length movies and programs are widely available across Chinese video-sharing sites. Online video rivals in China include Tudou.com, Yoqoo, and Rox.com.cn, among others.

Video site Youku.com doesn’t just offer pirated films. It also said it has forged deals with over 100 media companies, including Shanghai TV, Beijing TV, Jiangsu TV, China Film Group, Universal Music, EMI Music, Huayi Music, not to mention film, TV, and music performers in China.

Maverick Capital led the funding round and agreed to join the board of directors. Previous investors Brookside Capital, Sutter Hill Ventures, Farallon Capital, and Chengwei Ventures also participated in the funding. Western Technology investment agreed to the $10 million equipment loan.

Source:redherring