Warburg Pincus invests $200m in China serviced apartment chain

The private equity firm first invested $60 million in Mofang in a Series B round in 2013. Previously the company secured Series A financing from DT Capital Partners.

Founded in 2006, Mofang has built 70 directly-owned service apartments in over 10 Chinese cities. It plans to open 100 buildings through a franchising model this year. It aims to provide community facilities and services for young professionals, ranging from cafes to recruitment workshops.

Mofang has also collaborated with traditional banks and online peer-to-peer (P2P) lending platforms to allow residents to pay rent in installments.

The serviced apartment segment has drawn attention from VC and PE investors. Last year, Shunwei Capital Partners invested in Guangzhou's You+ International Youth Community, which rents to Chinese entrepreneurs below the age of 45. The complexes are set up to encourage a close-knit community atmosphere and strong communication among the residents.

Last year, Ping An Group and IDG Capital Partners invested in Mogoroom, a Shanghai-based serviced apartment services provider. The company then raised $25 million in a Series B round led by Haitong Kaiyuan Investment, followed by IDG and Ping An Ventures.

In 2013, SAIF Partners invested a reported RMB16 billion ($2.6 billion) to help fund the launch of China Young Professionals Apartment, which is a service apartment chain targeting middle class customers on a long term lease-and-operate contracts with landlords.

 

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• Topics
• Greater China
• Real estate
• Consumer
• Expansion
• China
• Consumer
• Warburg Pincus Asia
• Real estate
• Growth capital