Xiaozhu, China’s Airbnb, a unicorn after US$120m investment round led by Jack Ma-backed fund
Company expected to use Alibaba’s resources to fend off Airbnb and hotels
Xiaozhu, China’s answer to Airbnb, announced on Wednesday it had raised US$120 million in a funding round, officially making the five-year-old start-up a “unicorn” – a private company with a valuation of US$1 billion or more.
The funding round was led by Jack Ma-backed Yunfeng Capital and included existing investors, such as Morningside Venture Capital and Capital Today. The investment is expected to offer Beijing-based Xiaozhu not only a war chest but also the strategic resources needed to consolidate its leading position in China’s rapidly growing home-sharing market amid the rise of San Francisco-based giant Airbnb.
“With the scale-effect of our home-sharing network, we are able to bring in profit ourselves. What we care more about are the strategic resources brought by our investors,” Kelvin Chen, the chief executive of Xiaozhu, told the Post in an exclusive interview.
It is the potential opportunities for cooperation with Alibaba Group, which owns the South China Morning Post, that will help Xiaozhu in its battle with the traditional hotel industry and in offering better experiences to Chinese travellers, he added.
The capital injection comes amid reinforced efforts by Airbnb to crack the China market. This year, the world’s largest home-sharing company, with a valuation of about US$30 billion, pledged to invest as much as it needed to expand in China, where it has 120,000 listings.
Xiaozhu is on track for 300,000 listings by the end of the year.