BEIJING - Chinese short-term rental firm Xiaozhu.com said on Wednesday it has raised nearly $300 million (R4.4 billion) in a funding round led by Jack Ma’s Yunfeng Capital, amid fierce competition from Airbnb and local rival Tujia.com.
The company did not disclose its new valuation but said in November 2017 that it was worth more than $1 billion after closing a $120 million round, also led by Yunfeng Capital.
Xiaozhu said it will also launch a smart service and security system for its platform backed by technology from Alibaba.
China’s domestic tourism market has expanded rapidly in recent years, driven by a fast-growing middle class and the proliferation of online travel services.
The short-term rental market however is heavily regulated, due in part to strict address registration regulations, and local services have expanded heavily into value-added services to drive profits and beat competition.
As of April, Xiaozhu launched a full-service option that does not require landlords to interact with guests, including photography and cleaning services and internet-connected door locks.
It says it uses Alibaba’s facial recognition technology in its door locks in about 40 cities.
Xiaozhu said it currently has over 500 000 active listings.
The company’s top rival, Tujia.com, raised $300 million in October 2017 and is backed by Chinese travel-giant Ctrip.com International. At the time it claimed to have about 650 000 listing on its platform.
Airbnb is also beefing up its presence in China, though it has been forced to comply with strict regulations, including disclosing host information to Chinese government agencies.
The US firm, along with Tujia and Xiaozhu, has also been required to close off listings during politically sensitive events, including China’s Party Congress.