H Capital joins $273m round for HNA's travel finance unit

Other commitments came from Jade Investment Group, which controls Beijing Century Property Group, Sinolink Securities-affiliated Rising Investments, and Pacific Securities, among others. There were also contributions from local government-backed tourism funds representing Chongqing, Jining in Shandong province, and the Shandong-Binhai region. The round values the company at RMB80 billion.

It follows a RMB550 million Series B round completed last October and led by HNA-Caissa Travel Group, a publicly listed travel agency and tour operator under Hainan Airlines. It took a 7.94% stake.

E-life Finance's services include foreign exchange, VAT rebates, credit staging, third-party payment, and bank card collection. It follows a similar business model to American Express in its early years, seeking to leverage an expertise in tourism finance to build relationships with customers that encompass a broader portfolio of services.

Qizhang Chen, CEO of E-life Finance, said in a statement that the proceeds of the latest round would go towards product development, marketing and exploring investment opportunities domestically and overseas, including M&A.

China's travel and tourism industry was worth RMB5.4 trillion ($803 billion) last year, according to the World Travel & Tourism Council (WTTC). It is expected to grow 7% a year over the next decade - enough to surpass the US by 2024. Outbound travelers alone spent $215 billion in 2015, up from $140 billion the previous year. As they venture further overseas, Goldman Sachs expects spending to reach $450 billion by 2025.

The likes of online booking sites Ctrip and Qunar - the former agreed to buy the latter last year - are obvious success stories, while companies such as Tuniu and Tujia are carving out niches in the packaged tour and vacation rental spaces, respectively. However, investors still see untapped potential in tourism. Last year, Ocean Link won backing from General Atlantic and Ctrip for a dedicated tourism fund.

Various corporates are targeting the space as well, with Dalian Wanda Group spinning out its travel-related assets and merging them with a subsidiary of PE-backed Tongcheng Network Technology to create an online-to-offline (O2O) travel business. HNA is at the heart of these developments, having established itself as an airline operator and then expanding into complementary verticals.

HNA-Caissa and E-life Finance are small parts of a tourism division that spans transportation, hospitality, catering, shopping and entertainment. The company also has interests in logistics, environmental technology, and financial services. Last year, RRJ Capital led a $200 million Series A round for Jubaohui, an internet finance platform established by HNA.

H Capital was founded by Xiaohong Chen, formerly China managing partner at Tiger Global Management. A regulatory filing from early 2015 indicates that $300 million was raised for the VC firm's second fund, although this doesn't necessarily represent all the capital committed. A later filing for Fund III mentions a target of $500 million, although AVCJ understands the final total was around $600 million.

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• Topics
• Greater China
• Expansion
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• HNA Group
• China
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• H Capital