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Policy, Tech, Venture Capital

China Investment Corp Injects $100M In Airbnb As US Firm Seeks China Expansion

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This room at popular tourist destination in Dali, Yunnan province is available on Airbnb for US$45 per night.

Chinese sovereign wealth fund China Investment Corp has invested US$100 million in vacation home sharing giant Airbnb Inc. as the U.S. firm expands in China and is attracting more Chinese visitors internationally.

China Investment Corp, which oversees US$800 billion of the country’s foreign exchange reserve assets, has subscribed to roughly 10% of a US$1 billion funding round Airbnb just completed, according to media reports citing insiders.

San Francisco-based Airbnb disclosed the US$1 billion new fundraising in a securities filing with U.S. regulators last week. The company was reportedly valued at around US$31 billion in the latest round.

Both Airbnb and China Investment Corp did not immediately respond to inquires from China Money Network to confirm the deal.

With China Investment Corp’s capital injection, Airbnb has secured a strong state-backed shareholder that will unquestionably help the company’s further expansion in China.

China is an important market for Airbnb. To date, there have been more than 3.5 million guest arrivals by Chinese travelers at Airbnb listings all over the world, according to Airbnb.

Outbound travel from China grew 500% in 2015 alone, making China one of the fastest growing outbound markets for Airbnb and other travel companies.

Meanwhile, Chinese homeowners are increasingly listing on Airbnb to attract and host guests. There have been nearly one million guest arrivals at Airbnb listings in China to date, according to the company’s announcements.

The sharing economy is expected to represent 10% of China’s GDP by 2020, according to the National Information Center and China Internet Association, indicating enormous growth potential for companies operating in the ride sharing, home sharing and office sharing space.

In 2015, Airbnb teamed up with Sequoia Capital China and China Broadband Capital to widen its foothold in China.

Other Chinese investors, including Hillhouse Capital Group, Horizons Ventures, which is the private investment arm of Hong Kong Billionaire Li Ka-Shing, and GGV Capital invested in Airbnb previously as well.

Airbnb is reportedly seeking to acquire Xiaozhu.com, a Beijing-based short-term vacation home sharing platform backed by investors including Joy Capital, Bertelsmann Asia Investments (BAI), Morningside ventures and Capital Today.

Several other home sharing platforms in China are competing with Airbnb for market share, including Tujia.com, which raised a US$300 million round led by All-Stars Investment Limited in 2015. Smaller rivals include Shenzhen-based Zhubaijia, which is backed by CITIC GoldStone Investment Fund.

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