Airbnb targets booming China demand
The San Francisco-based ‘sharing economy’ app will be advised by local venture capitalists on how to adapt to sell to Chinese travellers
San Francisco: Airbnb has formed a partnership with China Broadband Capital and Sequoia China to help the apartment-sharing app expand into the Chinese market.
The San Francisco-based ‘sharing economy’ app will be advised by local venture capitalists on how to adapt to sell to Chinese travellers. One of its first tasks will be to recruit a chief executive for Airbnb China.
The partnership comes amid a $1.5 billion (Dh5.5 billion) fundraising round from investors including Beijing-based Hillhouse Capital and investment firm Tiger Global, and led by US private equity firm General Atlantic. The round, which boosts the company’s valuation to at least $24 billion, will be used to try to tap into booming demand in Asia.
Airbnb has seen strong growth in South Korea and Singapore and is looking to invest more across the region, according to someone familiar with the plans. Airbnb would not confirm that the new partners were also investing in the company.
Brian Chesky, co-founder and chief executive of Airbnb, said the number of Chinese guests staying in Airbnb properties around the world increased by 700 per cent last year, growing faster than the number of guests from any other single nationality.
“When we see this growth and hear the stories from our community, it is clear that Airbnb is uniquely positioned to connect Chinese guests to amazing travel experiences,” he said in a blogpost.
“And as we move into our next phase of expansion in China, we know we will need deep local knowledge and expertise to keep this momentum going.”
The start-up praised Neil Shen of Sequoia China parent Sequoia Capital for his experience in the Chinese internet and hospitality sectors — he founded Chinese travel site Ctrip.com — as well as CBC’s Edward Tian.
Airbnb said a larger group of investors would also contribute to the growth strategy in China.
“With teams of experienced entrepreneurs and accomplished investors, our partners at Hillhouse, Horizon Ventures and GGV Capital all have long track records of helping international start-ups achieve lasting success in the Chinese market, and we’re incredibly honoured to have them all on board,” Chesky said.
Horizon Ventures is a Hong Kong-based firm funded by Li Ka-shing. GGV Capital is a fund manager specialising in US and Chinese investments.
Airbnb’s new commitment to China follows a push from Uber, the $50 billion ride-hailing app start-up, which is making more than 1 million trips a day in China, despite facing tough competition from local rival Didi Kuadi.
Uber has created a Chinese arm, which could go public separately in China, a company spokesperson told Bloomberg last week. But Uber believed it was better to stay private for as long as possible, she added.
Airbnb also faces a Chinese rival in Tujia, which raised $300 million this month in a funding round that valued the company at more than $1 billion.
