It is reported that Airizu, founded in 2011 as one of the earliest Airbnb clones in China, is in a pickle now. It is said that Rocket Internet who takes controlling stake in it has cut off funding, and almost 80% of the Arizu team have been laid off. The remaining 30-staff team has been running without a CEO (former CEO Adrian LI had quit in last June).
However, at the same time Airizu’s peer players impressed local investors. Mayi and Xiaozhu both announced raising $10m; Tujia has secured RMB400m; ChengToo’s A round funding has been in full swing; meanwhile with the backup of Soufun’s traffic and plentiful cash, Youtianxia is also in good health.
Insiders commented that the possible reason for Airizu’s recent collapse could be the poor management of costs. Unlike average startups, Airizu isn’t owned by the founding team but Rocket Internet, the investment and incubation business run by the German venture capitalists Samwer brothers. The establishment of Airizu was initially aimed to build a brand and conquer the market within very short period of time before selling it to next investors.
Now Rocket Internet has suddenly called off the support into this original plan and required the company to cut down the team and the costs as well. The truth is earlier this year eLong and Homeway both offered to acquire Airizu with respectively $20m and $30m; however, Samwer rejected the offers as not satisfied with the offered prices. Later, the company lost its CEO Adrian Li, which also marked the beginning of the downturn of Airizu.