Danke, battling speculations about its financial viability less than a year after its New York initial public offering, appears to have ceased operating its home rental referral platform in China. The smartphone application of the Beijing-based company, formally known as Phoenix Tree Holding, has stopped listing vacant homes available for rent, their prices, photos or any other information. Danke’s executives could not be reached for comment on Christmas Day, a normal business and market day in China. Founded in 2015, Danke runs a business model similar to WeWork, but for residential property instead of office space. It rents apartments from landlords on a long-term basis, renovates and splits them into smaller units and then sublets them to tenants. The firm, which is yet to make a profit, operated more than 415,000 flats in 13 cities across China at the end of March, according to its latest quarterly report. Danke, which means “egg shells” in Chinese, billed itself as one of China’s largest co-living platform in its stock sale prospectus, mainly serving young urban professionals who cannot afford to buy expensive homes or pay large deposits because of a lack of savings. It takes a year’s rent upfront from tenants, while paying landlords on a monthly or quarterly basis. The company even arranged loans for tenants through its partner banks like WeBank – backed by China’s dominant social network operator and games publisher Tencent Holdings – who then repay the borrowings on a monthly basis. The incident appears to be the latest woe for Danke, after being caught in November between angry landlords who were owed their rent and sublet tenants who had paid their deposits but were evicted. The company’s liquidity crisis came just 10 months after Danke’s US$129.6 million stock sale in New York. Since the public offer, Danke’s shares have fallen by 75 per cent to US$3.31 this week before the Christmas trading break. “Danke’s case shows that cash management is a lesson that Chinese internet companies must learn,” said Yin Ran, a real estate and angel investor in Shanghai. “Excessive expansions by splashing out big sums of money could eventually kill the companies.” In 2018, China’s bike-sharing business witnessed a boom-to-bust cycle with most of the 70 players collapsing, which include Ofo, one of the leading players once valued at 20 billion yuan, owing to reckless expansions and lack of financial risk awareness. Danke’s aggressive expansion strategy hit the skids after the coronavirus outbreak led to heightened concern about living in rental and short-lease homes in China. That led to declines in the rental market, hurting the companies that operate sublet businesses, from Danke to WeWork for commercial office space. Chinese media outlet Thepaper.cn reported on November 18 that 5I5J Holding Group, the owner of Danke’s rival Xiangyu, was in talks to take over Danke, a report that was denied a day later by 5I5J.