Yunfeng leads $300m round for China's Xiaozhu
Xiaozhu, a Chinese online booking platform for short-term room rentals, has received a $300 million funding round led by Yunfeng Capital and Advantech Capital.
Additional contributions came from GIC Private, Joy Capital, Morningside Ventures, and Capital Today China Group. The new capital will go towards upgrading the company’s services, including measures to ensure the safety and security of users.
“We have supported every single funding round for the company since its inception. Now China is entering a period of prosperity for the sharing economy sector, we believe the patience shown by pioneers like Xiaozhu in cultivating the market will translate into substantial gains,” Yu Cheng, a partner at Morningside, said in a statement.
Founded in 2012, Xiaozhu received Series A funding from Morningside in 2013. Over the next two years, Legend Capital led a $15 million Series B and Joy led a $60 million Series C. In 2016, the company raised $65 million across two tranches, with Capital Today, Bertelsmann Asia Investments, and Magic Stone Alternative Investments among the backers. This was followed in 2017 by a Yunfeng-led Series E round of $120 million. Morningside, Joy and Capital Today all re-upped.
The company operates a C2C business model similar to that of US-based Airbnb and China’s Tujia, allowing homeowners to post properties that are available for vacation or business rentals. The platform now has more than 500,000 property listings covering over 650 destinations in China and overseas markets.
The involvement of Yunfeng – a private equity firm co-founded by Alibaba’s Jack Ma – has enabled Xiaozhu to establish ties with the e-commerce giant and its affiliates. For example, the company now uses Ant Financial’s facial recognition technology for guest check-ins and has partnerships with Alibaba-owned Feizhu and Xianyu, a tourism business and a second-hand goods trading platform, respectively. Xiaozhu also cut a deal with Booking.com’s Agoda to support overseas expansion.
Xiaozhu, Tujia and Airbnb are the dominant players in China’s short-term rentals market. While Xiaozhu has aligned itself with Alibaba, Tujia is backed by is backed by Ctrip. The Chinese travel-booking player led a $300 million Series E round for the company last year with All-stars Investment. Airbnb has more than five billion room postings globally but doesn’t disclose specific China figures. Tujia has around 1.2 million listings in China and overseas.
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