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Home-sharing startup Airbnb is gearing up for a deeper push into the booming market of Chinese travelers.
Airbnb has forged a partnership with investment firms Sequoia China and China Broadband Capital, which contributed to a $1.5 billion investment this summer, to find a chief executive officer for its China operations and widen its foothold in the world’s most populous country.
“The last year and a half has really been us dipping our toe in the water, learning about the culture, trying to even validate, ‘Would the Chinese people even want to use Airbnb?’” Airbnb Chief Executive Officer Brian Chesky said in an interview at the startup’s San Francisco headquarters. “Now we’re getting really serious.”
Chinese travelers took 109 million trips last year, up 11 percent from a year earlier, and have been the world’s top spenders in international tourism since 2012, according to the United Nations’ World Tourism Organization. The country has been difficult for U.S. technology companies to navigate, with Facebook Inc. and Google Inc. among those that have faltered.
Airbnb and its Chinese partners, who helped LinkedIn flourish in the country, declined to say how much the firms invested. The latest round valued Airbnb at $25.5 billion, people familiar with the matter have said. Chinese investment firms Hillhouse Capital, Horizon Ventures and GGV Capital also have invested in Airbnb.
The number of Chinese guests renting rooms through Airbnb rose 700 percent in the past year, making China the fastest growing outbound market for the company. While Airbnb remains focused on Chinese tourists traveling abroad, people in the country are signing up to host international tourists and domestic travelers.
The partners will help Airbnb “navigate the China market and create a truly localized presence for the company,” the startup said Tuesday in a statement. Chesky said he is scheduling trips to China in September and October. The company plans to expand in the country as it vies with domestic competitors.
Chinese rival Tujia.com raised $300 million in June at a valuation of more than $1 billion and is expanding quickly throughout Southeast Asia.
Uber Technologies Inc., another San Francisco-based startup, is further along in China than Airbnb. The ride-sharing company has told investors that it will spend $1 billion to expand in China this year.
“We’re going to invest quite a lot in China, but we’re still deciding how much,” Chesky said.
Uber, which competes with China’s Didi Kuaidi, says four of its 10 busiest markets are in China. The U.S. company also is searching for a CEO in China. Unlike Uber, Airbnb isn’t creating a separate Chinese company, Chesky said.
“Our businesses are very different. I mean, they are a local business, we are a global business,” Chesky said. “We think the really big opportunity is outbound global travel.”
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This article was written by ERIC NEWCOMER from Bloomberg and was legally licensed through the NewsCred publisher network.