Baidu, VC-backed travel website Qunar files for $125m IPO
Qunar, a Chinese travel website majority-owned by internet search giant Baidu, is looking to raise up to $125 million through an IPO in the US. GSR Ventures and GGV Capital still hold minority positions in the company but it is unclear whether they plan to use the offering as an opportunity to exit.
According to a regulatory filing, Baidu owns 61.05% of Qunar, while GSR has 6.27% and GGV has 4.54%. Since its inception in 2005, the company has received more than $25 million in backing from Mayfield Fund and Tenaya Capital in addition to GSR and GGV. Baidu paid $306 million for its majority holding in 2011.
The proceeds of the offering will be invested in technology, infrastructure and product development as well as being used to expand sales and marketing efforts.
Qunar differs from online travel sites such as Ctrip and eLong in that it searches for the best flight, hotel and package trip deals offered by these and other providers, and aggregating the most competitive prices. In this respect, it is much like US-based Kayak.com.
Qunar - which means "where to go" in Chinese - claims to be the world's most popular Chinese travel platform, receiving around 75 million hits in January 2013. User numbers grew from 71.7 million in 2010 to 187.3 million in 2012, while web users increased from 200,000 to 21.9 million over the same period.
The company posted revenue of RMB501.7 million ($81.9 million) in 2012 compared to RMB123.9 million two years earlier. However, expansion has led to a significant increase in cost of revenues, which meant that Qunar's net loss widened from RMB4.4 million in 2010 to RMB91.1 million in 2012.
China's travel industry saw compound annual growth (CAGR) of 22% for the four years to 2012, reaching RMB2.57 trillion, according to iResearch. The online segment specifically has been growing even faster, with a CAGR of 36.9% and a total value of RMB170.9 billion in 2012.
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