China’s Airbnb, Tujia.com, valued at US$1 billion in latest funding round
Tujia.com has raised US$300 million at a valuation of more than US$1 billion, as the Chinese vacation rentals site often compared with Airbnb pursues financing to bankroll a global expansion.
All-Stars Investment led the latest round of financing, the start-up said in a statement on Monday. The Chinese investment firm also backs smartphone maker Xiaomi.
Tujia, which means “home on a journey,” is focusing on expanding its services into Asian destinations popular with Chinese travellers, said Melissa Yang, the co-founder and chief technology officer.
Its main target markets include Thailand, Indonesia, South Korea, Taiwan and Hong Kong, though the start-up already connects homeowners with vacationers as far afield as Paris and Los Angeles.
Tujia expects to list 400 million to 500 million properties for rent by year’s end, from more than 300 million now, she said.
While the start-up is expanding, the Chinese economy is projected to grow at its slowest pace in a quarter-century. Yang said any slowdown would actually help the business by encouraging homeowners to list their properties in order to earn additional income. Travellers would also tend to seek cheaper alternatives to hotels, she said.
Tujia, which is backed by investors including HomeAway, Ctrip.com International, LightSpeed Venture Partners and GGV Capital, has undergone three previous rounds of financing.
The company and its peers face regulatory uncertainty around the world, as local interests consider the effect of on- demand services on traditional industries from taxis to hotels.
Unlike Airbnb, which in the US has drawn the attention of New York enforcement agencies for not paying hotel occupancy taxes, Tujia has so far remained relatively free of regulatory tangles. It collects the money and pays hotel levies as well as taxes on the rental income on behalf of property owners.
It also differs from its American counterpart in that it offers a range of ancillary services, from property management and inspections of listings to cleanups after guests leave.
Yang said the senior Chinese leadership has expressed support for new online businesses, including online vacation rentals.
Last month, Tujia rival Xiaozhu secured US$60 million in Series C funding, valuing it at more than US$300 million. The company is collaborating with Alibaba subsidiary Ant Financial to incorporate data on individuals’ credit ratings in the short-term rentals sector.
Additional reporting by James Griffiths