One of Airbnb’s major Chinese rivals is in talks with investors to raise about $100 million in a new funding round, people familiar with the matter said.
Beijing-based Xiaozhu was valued at $1 billion in its previous round in November when it raised $120 million from investors including Yunfeng Capital, a private equity fund backed by Alibaba founder Jack Ma. The talks for the new round are still in the early stage and investors haven’t yet committed to a deal, the people said. A Xiaozhu spokeswoman declined to comment.
Xiaozhu and other home-rental companies continue to face many obstacles. Securing a large number of qualified hosts with decent properties is a big challenge for the sector, industry executives say.
“The quality of services can vary dramatically from one host to another, and from one city to another,” a former Tujia executive told The Information. He also expects slower growth for the sector this year compared to last year. “The whole [vacation-rental] market in China is still emerging, and this business needs much more than just a home-sharing platform.”
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