youkuYouku.com, one of the largest and fastest growing Chinese video websites, said Sunday evening it has raised $40 million in its latest round of funding and signaled that it expects to raise up to $40 million more before the round is over.

We’ve written about the race between the big three Chinese video sites, which include front-runners Youku and Tudou, and third-place 56.com. Youku was founded three years ago, but has grown quickly to rival Tudou, which was founded in 2005 around the time when YouTube, France’s DailyMotion and a number of other global video leaders rose to prominence.

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 said it is in active discussion with other potential investors over a second tranche.

Previous investor Farallon Capital apparently did not reinvest.

The company has raised $110 million in cash funding and $10 million in venture debt from Western Technology Investment. Tudou, meanwhile, has raised at least $85 million.

The company said the latest round of funding will be used for things like syndicating professional media, producing more content, and investing in mobile.

Youku said it works with over 1,500 content license-holders to deliver professional programming. Youku said it has attracted 350 brand advertisers to date, and the company’s gross revenues for 2009 will surpass RMB 200 million.

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.