Video Island - a partner of Tesco.com, Toys R Us and Comet - has secured£6 million in second-round funding led by Cazenove Private Equity.
The investment will be used to improve Video Island's logistics and boost stock.
The cash injection follows£2.1 million of initial funding for last September's launch.
Benchmark Capital and Index Ventures provided cash in both the first and second rounds, but Cazenove is new to Video Island.
Video Island co-founder and chief executive Saul Klein said: 'This new round of funding is a clear testament to the success of our strategy in an exciting market. The support of these VCs and our unrivalled relationships with the studios, alongside our expanding partnerships, will help us to continue to distance ourselves from the competition.'
Cazenove Private Equity chief executive Tod Bensen said: 'When evaluating opportunities in this space, it was immediately clear that Video Island was the company best placed to take advantage of the explosive growth in online DVD rental.'
The DVD boom is expected to continue. Some 46 per cent of UK homes have a DVD player and that is forecast to rise to 83 per cent by 2007, according to Screen Digest.
The DVD rental market is expected to grow from£65 million in 2001 to£400 million in 2005, according to EUK.
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