Xiaozhu.com, the Chinese house-sharing platform, has lifted $120 Million in a round of funding headed by Yunfeng Capital of Jack Ma, powering the financial muscle of the firm as it seeks to fight with the U.S. giant Airbnb and local competitor Tujia.com. The biggest short-term rental company platform of the country claimed last week in a statement that the fundraising indicated it was now a “unicorn startup”, a term in venture capitalist referring to companies that hit worth of over $1 Billion. Airbnb was capitalized at $30 Billion in a round of fundraising last year.
The fast-growing middle class of China is boosting a boom in local tourism, with teen millennials more and more looking for choices to conventional tour group packages, which are well-liked among older travelers. Xiaozhu, on the other hand, claimed that the Chinese market was not simple to crack, particularly for worldwide firms. “In terms of proving a trade model that operates in China and developing it to scale, this can only be achieved by a domestic firm, though foreign companies may win a part of share of the market,” Chen Chi, chief executive of Xiaozhu, claimed to the media in an interview.
Airbnb, which claimed previously this year that it was seeking to extend its attendance in China, refused in April a media report claiming it was in discussions with Xiaozhu to join hands in markets such as South Korea and Japan. Chen claimed that his company was open to operating with other firms either overseas or in China. “We do not rule out the likelihood of working with any overseas marketplace, comprising Airbnb. We are open to collaboration in the Chinese market, so it relies on how the other company sees us,” he claimed.
Both Xiaozhu and Airbnb had to remove their listings in Beijing, the Chinese capital, in October when the nation conducted its sensitive 5-yearly Communist Party Congress, pointing the hurdles in the market of juggling politics and business. Chen claimed that the political component was one sole aspect to working in China, which offered local companies a further home benefit against overseas competitors.