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Investment, Private Equity

Yunfeng Leads $120M Round In Chinese Home Sharing Firm Xiaozhu.com

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Chinese private equity firm Yunfeng Capital, co-founded by Alibaba’s chief Jack Ma, has led a US$120 million series E round in Xiaozhu.com, a Beijing-based short-term vacation home sharing platform. The investment will enable Xiaozhou.com to better compete with local rivals and Airbnb China for more market share.

The round, which is joined by Chinese venture and investment firms Joy Capital, Morningside Venture Capital and Capital Today, reportedly valued Xiaozhu.com at unicorn level, a term used to describe a private company valued at over US$1 billion.

Xiaozhu.com did not respond immediately to an inquiry from China Money Network to confirm the valuation.

Launched in 2012, Xiaozhu.com currently has over 200,000 property listings in more than 300 cities globally. The company, together with another home sharing firm Tujia.com, a unicorn listed on China Money Network’s China Unicorn List, are regarded as the two biggest rivals against Airbnb’s expansion to China.

In November 2016, media reported that Airbnb was in talks to acquire Xiaozhu.com to expand its business in China, as the U.S. firm was struggling to gain market share in the nation’s home sharing market. But later Airbnb reportedly abandoned the deal in the belief that Xiaozhu lacked the ability to attract high-end customers.

This June, Airbnb China was again reportedly in deal talks with Tujia.com. At that time, Airbnb’s spokesperson Nick Papas stated in an email to China Money Network that the news report was “false”, without disclosing more details.

The Chinese home sharing industry is seeing rapid growth. The transaction value of the market is expected to reach RMB12.5 billion (US$1.9 billion) in 2017, up 43.6% year-on-year from RMB8.7 billion (US$1.3 billion) in 2016, according to iResearch.

Xiaozhu.com previously raised a total of US$65 million in series C+ and D funding rounds last November led by Joy Capital and Bertelsmann Asia Investments. One year prior, it raised a US$60 million series C round from Joy Capital, Morningside, and Heyu Capital.

In 2014, the company completed a US$15 million series B round from Legend Capital and Morningside. It also received tens of millions of U.S. dollars from Morningside in 2013.

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