VC-backed Tujia acquires Ctrip, Qunar's homestay assets

The deal comes as a $4.4 billion privatization of Qunar led by Ocean Management Holdings and Ctrip won shareholder approval. Last year, Qunar agreed to an all-share merger with its primary competitor Ctrip which will create a clear leader in the domestic hotel and air ticket booking market.

Financial terms of Tujia's acqusition were not disclosed but the transaction involves a share swap, accoridng to 36kr. As part of the deal, the homestay channels of both Ctrip and Qunar's websites and mobile apps, plus the relevant operations teams, will be merged into Tujia. It represents another strategic move by Tujia following the purchase of smaller industry peer Mayi.com, which focuses on short-term rentals. 

Much like Homeaway and Airbnb, Tujia allows homeowners to post properties that are available as vacation or business rentals. However, it differs from its US counterparts in that there is a property management business bolted on to the platform. It helps maintain and rent out properties, setting the rental prices and splitting the revenue with the landlord. At present Tujia's website features more than 410,000 apartments covering 329 travel destinations in China and 1,085 overseas destinations.

With this consolidation of the short-term rental industry, Tujia will focus on online integration, unifying inventory management, improving supply chains and standardizing services, Justin Luo, co-founder and CEO of the company, said in a release. It will launch a series of new products and services, as well as to further penetrating overseas markets, including Japan, South Korea, Singapore and Taiwan.

The company is also in the process of separating its online and offline businesses. The offline business includes self-managed homestay brand Sweethome, and villa and resort brand Tu Villa, while the online business comprises Tujia.com, Mayi.com and the newly-acquired business units of Ctrip and Qunar.

"In the segmented vertical sector of the homestay and accommodation business, Tujia has built itself into a great brand and established a high reputation," said Maria Sun, executive vice president of Ctrip. "Therefore, we are very pleased to integrate the favorable advantages by handling the homestay business of Ctrip over to Tujia."

Tujia has received several substantial funding rounds. Lightpeed China Partners first backed the company in late 2011, while Ctrip, HomeAway and CDH Investments participated in a Series A round in early 2012. A second round followed 12 months later, taking the total raised to $64 million. Tujia then received a $100 million Series C round from all existing investors in July 2014 and a $300 million round led by All-Stars Investments last August, with participation from Ctrip.

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• Topics
• Greater China
• Consumer
• Buyouts
• Technology
• China
• TMT
• Venture
• M&A
• Lightspeed Venture Partners
• All-Star Investments
• CDH Investments Management