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China’s Airbnb Clone Xiaozhu Secures $60M USD Series C Funding
As home-rental pioneer Airbnb is closing a whopping $1.5 billion USD round, one of its Chinese clones Xiaozhu – “little piggy” in Chinese – announced today that it has secured $60 million USD in Series C funding led by JOY Capital, and followed by Morningside ventures, CITIC Capital and Heyu Capital. The funding will be invested in improving the user experience, staffing, R&D, and brand, according to Chen Chi, CEO of the company.
The Beijing-based site resembles Airbnb, a C2C platform, in offering daily rental and short-term rooms. However Xiaozhu, like most Chinese Airbnb clones, resembles more of a B2C model where landlords can rent out the whole flat to avoid bunking with a stranger.
Founded by Chen Chi and Wang Liantao, two execs from Ganji-backed Airbnb clone Mayi.com, Xiaozhu has grown rapidly since it was founded in 2012. The company now claims to have home stay options in more than 200 cities around the country, up from 160 cities just one year ago. They also claim to have established offices in 20 cities.
To tap credibility issues in listing rentals online, Xiaozhu has incorporated data from Alibaba’s credit rating system Sesame Credit to better secure the safety of users. At the same time, it enhances the relationship between landlords and tenants to provide a more personal experience.
The new funding comes 13 months after a $15 million USD Series B round received in June last year, and an eight-digit Series A financing was raised in 2012. People with knowledge of the matter disclosed that Xiaozhu is in discussion with new investors, indicating the closure of a new round soon.
China’s short-term room rental market is expected to be worth 10.5 billion RMB (around $1.69 billion USD) in 2015, up 159.3% YOY from 4 billion RMB in 2014, according to data from research institute iResearch. Other homegrown market leader for short-term travel rentals in China include Tujia, Mayi, Zhuwona and Soufun-backed Youtianxia.
Image credit: Xiaozhu