Milestone leads $23m funding round in Xinhua Travel

According to the firms, Milestone, alongside other investors, will initially inject more than $23 million in Xinhua Travel and make a further investment based on the company's development. Xinhua Travel, which provides online travel services, financing options and media to Chinese customers, aims to be a leader in its industry. Since launching 18 months ago, the company has transacted RMB3 billion ($462 million) worth of purchases, with average monthly revenue growth of more than 120%.

Milestone has previously invested in 16 Chinese companies, five of which are listed overseas. These include NASDAQ-listed Focus Media, VisionChina Media and Dehaier Medical, New York Stock Exchange-listed Trina Solar as well as Hong Kong-listed GCL.

Chinese travel services websites have become popular among VC and growth investors who are keen to leverage the rise in mainland travelers.

In April, Tuniu.com, a China-based digital travel service, raised $50 million in a Series C venture capital financing round from firms including Sequoia Capital, DCM and Highland Capital, as well as Japanese e-commerce major Rakuten Group. And in June, internet search giant Baidu invested $306 million in Qunar, making it the majority shareholder in the company. VCs including GSR Ventures, Mayfield Fund, Tenaya Capital and GGV Capital have invested in Qunar.

According to iResearch, the country's online travel industry, valued at $454.8 million in 2008, will be worth $1.4 billion by the end of this year. That figure is expected to reach $3.8 billion by 2014, in line with China's growing internet use and rising disposable incomes.

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• Topics
• Greater China
• Technology
• Milestone Capital Partners