BEIJING (BLOOMBERG) - Airbnb's biggest rival in China, Tujia.com, has raised US$300 million (S$408 million) to fund a rapid expansion and ride a surge in Chinese families taking holidays around the world.
Online travel giant Ctrip.com International and All-Stars Investment led a round that valued the company at more than US$1.5 billion, it said in a statement confirming an earlier Bloomberg report. That is up sharply from a valuation of over US$1 billion when it last tapped financing in 2015.
China's largest vacation rental platform now handles more than 650,000 listings globally, focused on serving the world's largest population of domestic and international travellers.
Tujia's latest fund-raising comes as Airbnb quadruples its Chinese tech team to grow its domestic market share. It now has around 100,000 listings there and is fighting to convince the same group of middle-class consumers to use its services instead of domestic rivals.
China Renaissance was an adviser to Tujia and its New Economy Fund, which is now known as the Huaxing Growth Capital fund, was an investor in the round. Glade Brook Capital - a backer of Airbnb - also took part along with G Street Capital, which was advised by Macquarie Capital.
Tujia is intent on taking its rivalry with Airbnb global, including in Japan - one of the most popular destinations for Chinese tourists.
The Beijing-based startup aims to increase the number of properties available for holiday rental there to about 100,000 by 2019 from 10,000 now, Ms Tomoko Suzuki, chief executive officer of the Japanese unit, told Bloomberg. The startup said it now covers more than 1,000 foreign destinations.
But the battle may be fiercest in China, source of the world's most freely spending travellers and a booming market in its own right.
China's shared-accommodation operators are fighting house-by-house to boost their catalogs and win more users. They are relying on local know-how and relationships to stave off foreign giants like Airbnb, which has become a key global player in the space and now plans a more aggressive approach after taking it slow in past years.
The US home-sharing giant is adopting the name "Aibiying" in China, one that translates as "welcome each other with love", as it doubles investment in the country.
Building a brand in China is vital for global travel operators as increasingly affluent Chinese holidaymakers reshape the global tourism market. They will take 67 per cent more trips in 2020 compared with 2015, according to Bloomberg Intelligence. Much of this is driven by millennials more willing to opt for independent travel and skip the packaged tours favored by their parents' generation.
"China's travel accommodation sharing industry, of which Tujia is the leading player, will gradually be fully accepted as a travel option," said G Street Capital associate Cai Jiayi.