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Breaking the Record in China’s Accommodation Sharing Industry: Tujia’s online platform receives $300 million in independent financing

October 11, 2017 OTA News No Comments Email Email founder and CEO, Luo Jun, announced via an internal message that following the separation of Tujia’s online and offline departments, the online platform has successfully completed its ‘E’ round of funding.

“For this round, our online platform business raised 300 million USD, at a valuation of over 1.5 billion USD. The lead investors were Ctrip and All-Stars Investment, with China Renaissance’s New Economy Fund, Glade Brook Capital, and G Street Capital also participating in the round,” said Luo Jun.

Following the company’s D and D+ rounds of financing completed in August of 2015, the capital market has once again showed its continued support in as it remains the most funded player and maintains its reputation as a ‘unicorn’ in the accommodation sharing industry.

Leading the way for China’s alternative accommodation industry

This round of financing – the first independent round since the separation of Tujia’s online and offline departments – reflected the great confidence and optimism that the capital markets have toward Tujia’s online platform.

In his internal message, Mr. Luo revealed that Tujia has maintained steady growth in its business since the D and D+ rounds of financing. He said the funds raised from this round would be used both to “work towards optimizing the user experience by standardizing aspects of our alternative travel accommodations such as linen washing, cleanliness, and smart capabilities,” and to “further invest in the domestic high-end real estate market and in foreign markets.”

In his internal message, Luo Jun also emphasized: “As technology and creativity are the industry’s foremost sources of productivity, Tujia will continue as always to constantly make breakthroughs in the areas of innovative technology and business, leading the way for China’s alternative accommodation industry.”

Continued support from the capital market

The leading investors in this round of funding were Ctrip and All-Stars Investment.

Ctrip’s Co-Founder and Executive Chairman of the board, James Liang, said: “The change in Chinese attitudes toward consumption has been accompanied by the continuous improvement of short-term alternative accommodation products. The domestic e-accommodation sharing market resembles Airbnb and similar enterprises in its rapid growth, becoming in just a short time an essential part of the travel accommodation industry.” Ctrip’s continuous investment and cooperation with Tujia verifies this point.

All-Stars Investment’s Founding Partner Li Weidong stated: “In the past two years, Tujia has been continuously innovating, expanding through M&A and new business ventures, further raising the competitive barrier and maintaining its unquestioned dominance in the domestic accommodation sharing market. As one of the leaders in China’s sharing economy alongside Didi Chuxing, we see enormous potential for Tujia’s growth.”

Several new investors also participated in the round, including Glade Brook, an investor in Airbnb and Uber, demonstrating the international capital market’s confidence in Tujia’s vast prospects for the future.

Glade Brook’s Founder and Chief Investment Officer Paul Hudson stated: “Glade Brook is pleased to be invested in Tujia. We see significant growth in China’s online short term rental market and expect it to reach similar penetration levels of accommodations bookings as in the US and Europe. We believe Tujia will continue to lead this rapidly growing market, and we look forward to cooperating with the team to create value.”

China Renaissance served as financial advisor to Tujia. The firm has previously advised Tujia on earlier rounds of financing. In addition, Huaxing Growth Capital fund, the private equity investment platform under China Renaissance Group that focuses on “new economy” businesses, participated in this fundraising round.  The fund, which is also known as the New Economy Fund, actively looks for potential unicorns among China’s growth and mature stage companies, and has co-invested in dozens of notable companies, including Didi Chuxing, Hero Entertainment, HomeLink and JD Finance.

Bao Fan, Chairman and CEO of China Renaissance Group commented: “We’ve been working alongside our client Tujia for a long time, and we are very happy to be participating as an investor as we believe in Tujia’s business model and its early mover advantage.  We are confident that Tujia has the ability to build its business to a scale that will support its continued growth, and we are optimistic about the future of the online short-term rental sharing market in China.”

Cai Jiayi, an Associate at G Street Capital, which is also an investor in Didi, said, “Against the wider backdrop of mobile internet and the sharing economy, China’s travel accommodation sharing industry, of which Tujia is the leading player, will gradually be fully accepted as a travel option. From a macro perspective, accommodation sharing is effectively activating housing reserves, spurring the development of many tourist destinations, and having an extremely positive impact on the sustainable development of China’s economy.”

Rapid Development 

Tujia is a worldwide accommodation booking platform. Since launching on December 1, 2011, it has grown to cover 345 domestic destinations and 1,037 foreign destinations, with over 650,000 online listings, in the span of just 5 years, becoming China’s largest provider of alternative accommodations. Tujia has integrated three accommodation booking platforms: Ctrip Homestay, Qunar Homestay and Tujia has also worked with eLong, WeChat, Baidu, Tongcheng and other partners to build a strategic, cooperative distribution network. Furthermore, Tujia has signed contracts with 218 government agencies and reached strategic cooperation agreements with a large number of domestic real estate developers, including over 1 million units of accommodation.

Since the second half of 2016, Tujia has been focusing on integrating and expanding booking platforms for various domestic mainstream online accommodation reservation platforms. In 2016, Tujia saw a breakthrough in the number of its online listings though its merger with In 2017, with the integration with Ctrip Homestay and Qunar Homestay, Tujia’s online traffic, user number and revenue made a further leap.

Tujia has achieved exponential gains in the domestic market, with transaction volumes growing over 300% year-over-year. Internationally, especially in Asia, Tujia has grown exceptionally, increasing fivefold this year. On the eve of the 2017 National Holiday or “Golden Week,” Tujia released its “Tujia Mansion” product, which received unprecedented positive responses and saw transaction volumes during the Golden Week exceed the previous year’s by 400%. With an average nightly price for a single room exceeding 3,000 RMB and the most expensive room at 45,000 RMB, “Tujia Mansion” demonstrates the growing demand for luxury offerings by high-end customers. Following the introduction of the “two-child policy,” Tujia is best positioned to capitalize on the increase in demand for family-friendly accommodation options.

As of August 2017, Tujia’s app has already been downloaded by over 180 million users, with several hundred thousand customers making booking inquiries every day. Users of Tujia’s online platform have given the app an average satisfaction rating of over 4.6 (out of 5), and 98% of users expressed in their feedback that they would return to a Tujia property in the future  and would recommend it to their friends.

No matter from the perspective of the scope of its financing, the breadth of its accommodation options, its vast accommodation reserves, order volume or user satisfaction, it is clear that Tujia has entered a period of rapid development. Alongside the growth of China’s economy, rise in the sophistication of consumer attitudes, and the advance of new laws around the accommodation industry, there is no doubt that Tujia will bring many new opportunities to the Chinese travel accommodation sharing industry.

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