Chinese Airbnb clone Xiaozhu valued at US$300m as investors tap China’s ‘sharing economy’
A Chinese start-up that helps people rent out their houses and apartments for short periods of time has secured US$60 million in Series C funding from a quartet of private equity firms, as interest grows in China’s shift to a so-called sharing economy.
Beijing-based Xiaozhu, which has a business model resembling that of US company Airbnb, said on Wednesday the funding round was led by Joy Capital.
Other investors include Hong Kong family fund Morningside Ventures, Heyu Capital, and Citic Capital, in which sovereign wealth fund China Investment Corp is a part owner, it said. This puts Xiaozhu’s value in excess of US$300 million.
Chief executive Chen Chi told TechNode that the company would use the new funding to improve user experience, staffing, research and development, and brand awareness.
“The sharing economy has a huge influence on China’s internet sector, and our investment in Xiaozhu reflects our bullish view on how the sharing economy is bringing about disruption in the traditional lodging sector,” Xiao Li, a founding partner of Joy Capital, told the Wall Street Journal.
Xiaozhu, which means "little pig" in Putonghua, was founded in August 2012 by Chen and Wang Liantao, who met while working at Mayi, another Chinese clone of Airbnb.
Xiaozhu raised around US$10 million in Series A funding in January 2013, following this up in June last year with a second round that brought in a further US$15 million.
The company said it is also collaborating with Ant Financial, the financial services arm of Chinese e-commerce king Alibaba, to incorporate data on individuals' credit ratings in the short-term rentals sector.
China's short-term rental market is expected to be worth upwards of 10.5 billion yuan (US$1.69 billion) this year, up from 4 billion yuan in 2014, according to market analysts iResearch.
Last month, Airbnb closed a US$1.5 billion funding round, including investment from Chinese fund Hillhouse Capital, which is also a leading investor in car-hailing app Uber.