Airbnb in advanced talks to buy Xiaozhu

BEIJING: Airbnb Inc is in talks to acquire China’s Xiaozhu.com to expand in the nation’s home rental sharing market, according to a person familiar with the matter.

The companies had held multiple meetings and the discussions were advanced in nature, said the person, asking not to be identified as the talks are private. A deal was likely, said the person.

While Airbnb is the biggest platform for people to rent their houses to travellers globally, it’s grappling with more established local rivals Xiaozhu and Tujia.com in China.

The San Francisco-based company already has about 75,000 properties listed in the world’s most populous nation and plans to increase staffing 10-fold to 300 full-time workers.

China’s online holiday rental market could reach 10.3 billion yuan (RM6.69 billion) in transaction volume by next year, up from an estimated 6.78 billion yuan this year, according to IResearch.

Before the deal surfaced, the United States startup had been anticipating two million “room nights” in China, said the person.

The company had also recently While Airbnb is the biggest platform for people to rent their homes to travellers globally, it’s grappling with more established local rivals Xiaozhu and Tujia.com in China. AFP pic inked a partnership agreement with Tencent Holdings Ltd, whose messaging service WeChat has more than 800 million active monthly users and provided 60 to 70 per cent of Airbnb China’s logins.

Xiaozhu would give Airbnb an instant boost in the world’s secondlargest economy. The Chinese startup, which was founded in 2012, this month said it raised US$65 million (RM289.9 billion) of new funding.

The company said it had 10 million active users and more than 100,000 listings in 301 cities across the country. Chief executive officer Kelvin Chen Chi said at the time of the funding announcement that Xiaozhu expected to deliver 500 per cent organic growth this year.

A deal for Xiaozhu would also help Airbnb reduce the risk of a costly battle for market share.

Uber Technologies Inc lost more than US$1 billion in China in a battle with Didi Chuxing before selling its business in the country to its rival.

In September, Airbnb said it raised US$555.5 million in new funds as it expanded around the world.

The funding round, which valued the company at US$30 billion, could eventually reach US$850 million, said a person familiar with the matter.

Tujia was valued at more than US$1 billion after a US$300 million funding round last year from investors, including All-Stars Investment Ltd.

The company is also backed by HomeAway Inc, Ctrip.com International Ltd, LightSpeed Venture Partners and GGV Capital. The company said it had listings for 450,000 houses in total, including 335 destinations in China and 1,018 overseas. Bloomberg