Airbnb finally got serious about the Chinese market this year, and now its chief rival in the country -- Tujia -- has tapped investors for $300 million more to sharpen its focus on global markets.
The new funding values Tujia at $1.5 billion, the startup confirmed. That's a big jump on the $1 billion it commanded when it last raised in 2015, but the company is going to the company's online booking business, which was decoupled from its offline unit earlier this year.
CEO Luo Jun said the money would go to "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."
The funding was led by online travel giant Ctrip -- the Nasdaq-listed firm that works in partnership with Tujia -- and All-Stars Investment, with participation from China Renaissance’s New Economy Fund and G Street Capital. Interestingly, Glade Brook, which is also an investor in Airbnb as well as Uber, was involved in the round, too.
Tujia claims it has racked up 180 million downloads to date with "several hundred thousand customers making booking inquiries every day." The company said it currently covers 345 destinations in China, and more than 1,000 overseas thanks to partnerships like its relationship with Rakuten in Japan. In total, it claims some 650,000 listings. Airbnb doesn't give numbers for China, but worldwide it says it has four million listings across 65,000 cities.
Tujia has been busy on M&A activity after it snapped up smaller rival Mayi.com in June. Airbnb had been linked with a China-based acquisition of its own, but rumors of a deal to buy Xiaozhu never came to fruition.
The firm's investors say they are bullish that the Chinese market can grow to be as big as the U.S., giving Tujia the chance to become as big as Airbnb.
"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 executive chairman of the board James Liang said.
That statement was echoed by Glade Brook, the Airbnb investor.
"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 U.S. and Europe," added Glade Brook founder and chief investment officer Paul Hudson in a statement.