All-Stars Investment leads $300m round for China’s Tujia

The Ascott, a serviced residence business unit of Singapore-listed CapitaLand, has agreed to invest S$67.69 million ($50 million) in the company as part of the round. Other contributions came from existing backers Lightspeed China Partners, GGV Capital, CDH Investments, Qiming Venture Partners and China Broadband Capital, plus strategic players Ctrip International, according to a statement.

The new round of funding will be used to expand Tujia's online-to-offline (O2O) business, improve user experience via technology upgrades, and for branding and marketing purposes.

"China is the world's largest tourism market, is the biggest spender on outbound tourism, and has the largest number of empty apartments. All these factors help nurture the home-sharing industry," Richard Ji, co-founder of All-Stars Investment, said in the statement. "The size of the home-sharing segment is expected to surpass traditional hotels in the future given its asset-light business model and growth rate."

Much like Homeaway and Airbnb, Tujia operates a platform on which owners can post properties to be hired out as vacation or business rentals. It takes a commission off the top of the rental price. However, the company differs from its US-based counterparts in that there is a property management business bolted on to its website. For example, an individual with a holiday home in Sanya can appoint Tujia to maintain and rent out the property, with the company setting the price and splitting the revenue with the landlord.

At present Tujia's website features more than 310,000 apartments covering 255 travel destinations in China and 133 overseas destinations such as Bangkok, Singapore and Tokyo. In China, it has already inked cooperation agreements with over 170 provincial and municipal governments, including Shandong, Fujian, Chongqing, Suzhou, Ningbo, Wuxi as well as Chinese top scenic areas and heritage sites, such as Zhangjiajie and Wuyi Mountains.

The firm plans to scale up its online customer-to-customer business, establish an O2O home-sharing ecosystem and develop its business overseas. As part of the agreement, Ascott will form a joint venture with Tujia, which will operate and franchise serviced apartments in China. Ascott will make more than 400,000 apartments under its three brands - Ascott, Citadines and Somerset - available on Tujia's website by the end of 2015. It wants to have 20,000 units listed on Tujia by 2020.

Lightspeed came across Tujia in late 2011 while looking for investments in the travel and tourism space. Tujia's founders already had start-up pedigree. Jun Luo, was formerly joint CEO of NASDAQ-listed China Real Estate Information, while Melissa Yang used to be CTO of Escapia, a US vacation rental platform bought by HomeAway.

Ctrip and HomeAway both participated as in the Series A round in early 2012. This round, worth more than $10 million, was led by Lightspeed, with CDH Investments also participating. A second round followed 12 months later, taking the total raised to $64 million. The existing investors were joined by GGV, Qiming and CBC.

In June last year, Tujia rasied $100 million in Series C funding from all existing investors.

China Renaissance acted as the financial advisor for the latest investment.

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• Topics
• Greater China
• Venture
• Expansion
• Consumer
• Real estate
• Technology
• China
• TMT
• Growth capital
• Consumer
• Venture
• Real estate
• Lightspeed Venture Partners
• GGV Capital
• CDH Investments Management
• Qiming Venture Partners
• China Broadband Capital