China's Airbnb, Tujia.com, raises $300m in latest funding round
Tujia, a Chinese vacation rental company similar to Airbnb announced today that it had raised $300 million from a group of investors to expand its business overseas, increase marketing and offer new products. The company added that the new deal values Tujia at more than $1 billion, without disclosing the size of the stake the investors bought. By comparison, Airbnb is valued at $20 billion. Hong Kong-based All-Stars Investment Ltd, which has invested in Chinese smartphone maker Xiaomi Inc and taxi hailing app Didi Kuaidi, led the funding round.
Tujia, which means "home on a journey," is focusing on expanding its services into Asian destinations popular with Chinese travelers, Melissa Yang, the co-founder and chief technology officer, said in an interview. Tujia expects to list 400,000 to 500,000 properties for rent by year's end, from more than 300,000 now, she said.

"We are speeding up our expansion to meet the demands of Chinese tourists," Ms Yang said Monday by phone. "Southeast Asia is a destination favored by Chinese tourists and so that's an area of focus for us."

Its main target markets include Thailand, Indonesia, South Korea, Taiwan and Hong Kong, though the startup already connects homeowners with vacationers as far afield as Paris and Los Angeles.

While the startup is expanding, the Chinese economy is projected to grow at its slowest pace in a quarter-century. Yang said any slowdown would actually help the business by encouraging homeowners to list their properties in order to earn additional income. Travelers would also tend to seek cheaper alternatives to hotels, she said.

Tujia, which is backed by investors including HomeAway Inc., Ctrip.com International Ltd., LightSpeed Venture Partners and GGV Capital, has undergone three previous rounds of financing.

The startup often draws comparisons with Airbnb, the service that helped foster what's now referred to as "the sharing economy."

Tujia will be adding a new service that links users directly with homeowners, Ms Yang said, drawing it still closer to its US counterpart. In the past, the majority of the Chinese company's listings had been managed either by itself or third- party companies, instead of homeowners.

Tujia and its peers now face regulatory uncertainty around the world, as local interests consider the effect of on-demand services on traditional industries from taxis to hotels.

Unlike Airbnb, which in the US has drawn the attention of New York enforcement agencies for not paying hotel occupancy taxes, Tujia has so far remained relatively free of regulatory tangles. It collects the money and pays hotel levies as well as taxes on the rental income on behalf of property owners.

It also differs from its American counterpart in that it offers a range of ancillary services, from property management and inspections of listings to cleanups after guests leave.

Ms Yang said the senior Chinese leadership has expressed support for new online businesses, including online vacation rentals.