Hony leads $148m investment in VC-backed tour operator Tuniu

According to a statement, Hony and JD.com, China's second-largest B2C e-commerce platform have each purchased $50 million worth of new shares issued by the company. Ctrip International, the largest online travel agency in China, has invested $15 million, with Tuniu's CEO and COO committing $16.5 million apiece.

The purchase price is $4.02 per ordinary share, or $12.06 per American depositary share (ADS), representing a 3.19% premium over the average close for the last five trading days.

Tuniu went public in the US in May, raising $72 million. The online travel platform made a regulatory filing earlier this month with a view to raising $100 million through a follow-on offering. This plan has now been scrapped.

Tuniu expects to deepen its partnership with Ctrip, while using the new capital to extend its reach into China's second-tier cities and to conduct R&D into technology, mobile and travel-related products.

"The internet, especially the mobile internet, is changing people's lifestyles and influencing many traditional industries. Hony Capital focuses on how new technology transforms traditional industries through the combination of online platforms and offline services," John Zhao, Hony's founder and CEO, said in a separate statement.

Most travel e-commerce companies in China are essentially search engines that provide information on hotel and flight bookings plus a payment mechanism. Tuniu, which was set up in 2006, opted for a different tack, focusing specifically on packaged tourism, providing lead generation to the offline tourism agencies that have traditionally dominated the space.

According to AVCJ Research, Gobi provided the Series A round in 2008, contributing $3 million. DCM joined Gobi in the second round in 2010, worth $10 million. In 2011, Tuniu secured a $50 million Series C round as Highland Capital Partners, Japanese e-commerce firm Rakuten and Sequoia joined the investor roster. Tuniu's Series D round came last September as Temasek put in $50 million and DCM re-upped to the tune of $10 million.

The institutional backers did not sell any shares in the IPO, with only four angel investors cashing out a small portion of shares. DCM, Temasek, Gobi and Sequoia hold 69.3% of the company between them. DCM put in additional money through a private placement alongside the IPO, committing $15 million, while Ctrip and Qihoo 360 contributed $15 million and $5 million, respectively.

Tuniu posted a net loss of RMB79.6 million ($13 million) in 2013, down from RMB107.2 million the previous year. Revenue rose from RMB1.1 billion to RMB1.9 billion over the same period. The firm recorded a loss of $17 million in the third quarter of this year compared to $2 million for the same period last year.

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• Topics
• Greater China
• Consumer
• PIPEs
• Venture
• Hony Capital
• Consumer
• PIPE
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• China