Wowqu, a Chinese long-term youth apartment rental brand, yesterday announced the completion of a RMB200 million (US$29.73 million) series B financing found led by MoFang (China) Investment, the investment arm of Warburg Pincus-backed apartment rental company Mofang Apartment.
Launched in April 2015 by Chinese hotel operator Plateno Group, Wowqu primarily delivers long-term accommodations to the so-called "post-90s," usually white-collar office workers born between 1990 and 1999. The company also targets business travelers after it developed serviced apartments to provide hotel-like amenities such as room service in December 2016.
The Guangzhou-based company said that it currently serves more than 100 million customers across over 70 communities. It has expanded from first- and second-tier cities like Beijing, Shanghai, and Guangzhou to other cities in China.
The apartment operation essentially applies to "the long tail" theory — a strategy that allows businesses to realize significant profit out of selling low volumes of hard-to-find items, said Wowqu’s founder Liu Hui, adding that this defines it as an area that many investors will think twice before they pour money.
Wowqu plans to use the proceeds of this round to optimize its talents management, operational efficiency, IT technology, project investments, and supply chain operation.
The company raised a RMB50 million (US$7.43 million) Pre-A round from 58.com, a Chinese classified advertisement website in August 2017.