Airbnb’s China rival seeks funds
One of Airbnb’s biggest Chinese rivals is in talks with Singapore’s sovereign wealth fund and other investors for more than $200m in new funding to take on the US home- sharing giant.
One of Airbnb’s biggest Chinese rivals is in talks with Singapore’s sovereign wealth fund and other investors for more than $200m in new funding to take on the US home sharing giant, according to people familiar with the deal.
Beijing-based Xiaozhu.com, said to have been a potential acquisition target for Airbnb in 2016, lets users rent and host homes and apartments across the country.
It is now targeting a valuation greater than the $1bn it hit in November 2017, but talks are still under way, said the people, who asked not to be identified.
Singapore’s GIC is considering an investment in a round that is already oversubscribed, they said.
The deal comes on the heels of a $1bn infusion for India’s Oyo Hotels, much of which will bankroll an expansion in China. The country’s home-stay market is surging thanks to middleclass consumers seeking novel accommodation and ample capital provided by its biggest technology giants. Xiaozhu has partnered with e-commerce leader Alibaba Group Holding while Tencent Holdings and Ctrip.com International back its biggest homegrown rival, Tujia.com.
Both Chinese players represent formidable competition for Oyo and Airbnb, which is banking on the country generating much of its future growth.
Airbnb is marketing China as a destination by touting unique local experiences, while also trying to get local travellers to use its service abroad.
Setbacks in Japan, Hong Kong and other markets have increased the need to make its business work in the mainland, where it has built a local engineering team and abided by controversial laws that mandate storing data in-country.
Chinese listings on Airbnb have grown more than 125% in the past year and the number of Chinese guests doubled in 2017, the company said in July.
Xiaozhu also offers services that help homeowners improve the look and feel of property for would-be renters.
$1bn the valuation Xiaozhu. com hit in 2017, which it is now hoping to surpass