Beijing-based Chinese catering chain Quanjude says the company will raise a total of RMB350 million ($56 million) by offering 24.95 million ordinary shares through a private placement.
IDG will purchase 17.8 million of the shares for RMB250 million, holding a 5.78% stake after closing.
China Lodging will buy 7.1276 million shares for RMB100 million, which will give it a 2.3% stake.
Both investors are subject to a 36-month lock-up period.
Beijing Tourism Group, the biggest shareholder of Quanjude, has reduced its stake to 42.72% from previous 46.48%.
The net proceeds will be used for six projects, including the construction of a central kitchen and restaurant network.
The transaction is expected to close within the next six months.