Tujia, breaks the record in China
Tujia, sometimes called the Airbnbn of China, has just finalized a new funding round worth $300 million, beating its earlier target for raising $250 million.This kind of fund-raising outperformance has become quite routine these days, helping to boost a new generation of Chinese Internet companies that often simply copy western business models.
Tujia has become hot property by borrowing Airbnb’s business model of linking up property owners with travelers looking for cheaper, homier accommodations than traditional hotels. Tujia’s latest funding is its fourth to date, and follows a previous round that saw it raise $100 million about a year ago.
All-Star Investments led the latest funding round, giving Tujia a valuation of more than $1 billion. Other big investors include leading Chinese online travel site Ctrip (Nasdaq: CTRP) and US-based HomeAway (Nasdaq: AWAY).
Tujia seems like a good bet due to its unique positioning in China’s crowded online travel space. It’s the leading company in its area, and the kinds of properties it lists could also be quite attractive to China’s legions of budget-conscious families.
Tujia benefits from the booming investments in the industry
Tujia should also benefit from China’s huge number of people who purchased properties for investment purposes. Many of those properties are sitting idle now that the real estate market has cooled, and many of these owners might consider renting them out to make some money while they wait for things to improve.
That situation has helped Tujia to sharply boost the number of properties listed on its site. The company already has 300,000 such properties, and expects the number to swell to as much as 500,000 by the end of this year. Part of the big expansion will come as Tujia boosts its overseas presence, with a particular focus on Asian markets like Taiwan, Indonesia, Thailand and South Korea.
I’m always a little skeptical of Chinese Internet companies that try to go global too early, especially when they’re just copycats of western names like Airbnb. But that said, Tujia certainly looks strong in its home China market and should be able to quickly become a major force there. I’m less confident of its global expansion, but do think the company should offer an attractive choice for investors if and when it makes an IPO in the next 1-3 years.
Doug Young from Young China Bizz
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