China’s Airbnb equivalent Xiaozhu raises $120m in funding

Chinese peer-to-peer home rental platform Xiaozhu announced Wednesday that it has received $120m in the latest financing round. The firm said vaguely in the statement that the current round has bumped the startup to unicorn status, which means the valuation of this round would be around $1 billion or higher.

Yunfeng Capital, the VC firm backed by Alibaba chairman Jack Ma and Target Media founder Yu Feng, led this round. Existing investors including Joy Capital, Morningside Ventures, and Capital Today also participated.

With the new funding, Xiaozhu — ‘little pig’ in English — plans to invest more resources to introduce technologies further enhancing security of house-sharing and building a sustainable platform ecosystem for the whole industry, according to Kelvin Chen Chi, co-founder and CEO of Xiaozhu.

Founded in 2012, Xiaozhu now has listings in over 400 destinations inside and outside of China. As of the first half of this year, it claimed over 20 million active users and more than 200k houses were listed on the platform. Xiaozhu landed a $60 million Series C in 2015, and a $15 million B round in 2014.

“After 5 years of exploration, Xiaozhu pioneered house-sharing business model in China and created a new bilateral market from ground up by building an entire service system that consists of cleaning and photography services,” said Kelvin.

Despite the home sharing boom led by Airbnb in the overseas market, the trend didn’t catch up in China until recent years thanks to the popularity of sharing economy concept in China. Now, the vertical is seeing more competitors.

The house-sharing juggernaut Airbnb is accelerating its China expansion with more localization efforts, despite the recent hiccups in China management team. Another leading rival in the field Tujia is also fully loaded with $300 million fresh funding to explore this market.