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Mafengwo, a social trip-planning site, has raised a Series D fundraising round of $133 million, and co-founder and CEO Chen Gang said he planned to turn the business into a shopping mall similar to retailer Alibaba, but focused on travel.
Venture capital firms General Atlantic, Ocean Link, Temasek, Yuantai Investment, and Hopu joined as new investors in the company, while existing investors Capital Today, Qiming Venture Partners, and Hillhouse Capital also pitched in.
The company has raised more than $153 million to date. It declined to disclose its Series C round other than to say it had raised “tens of millions of dollars” in 2015.
Mafengwo has drawn the interest of investors to its claim that it has attracted an audience of Chinese millennials who travel independently instead of taking group package tours, as had been commonplace among Chinese for decades.
Mafengwo claims more than 100 million registered users contributing and consuming its content. Its mobile app has nearly 4 million active monthly users, according to online data company Analysys Qianfan.
The Beijing-based business launched in 2010 as a social travel website, aggregating user-generated content. The company used the content to create travel guides with advice on attractions, hotels, flights, travel routes, maps, dining recommendations, visas, and insurance.
It was not unlike a mix of TripAdvisor, Trip.com (then called Gogobot), and Lonely Planet. It created guides and posted photos and tips shared by users, offering suggested itineraries that were downloadable, and that included items that could be easily booked.
In 2012, the website and mobile app made it easy for users to book the trips they were reading about through affiliate deals with Booking.com, Agoda, Ctrip, and eLong.
In 2016, the company claimed about $600 million, or more than 4 billion yuan, in transactions through its website and app. That reduces the company’s dependency on advertising as a revenue stream. Purchases for travel services, such as tickets to sports events, local tours, and hotel reservations, account for a significant share of the transactions, although as a private company, Mafengwo doesn’t disclose the details.
Today, Mafengwo choreographs sample itineraries thematically presented in a calendar format using lush photography, audio samples of local music, and simple narratives, such as a recent travelers tragically destined never-to-meet story.
Mafengwo’s goal is to boost transactions by analyzing customer data to provide more tailored recommendations of things to buy. An early sign of the potential came in September, when luxury retailer DFS — which has duty-free shops in 17 major airports and 18 downtown malls across Asia — offered Mafengwo users who made bookings on the app a coupon to be redeemed in its shops. Users could store and redeem the coupon via WeChat, the widely use social messaging service created in China.
The company is not alone in the space. Mafengwo rival Qiongyou has raised more than $70 million and has the backing of UTour Group, a large Chinese tourism company, and Alibaba.
Until now, Mafengwo.cn has emphasized content for Chinese traveling domestically while Qyer has emphasized overseas destinations — suggesting the potential for a possible synergy at some point. That said, each company has content for cities and resorts worldwide.
Dianping, a business-listings platform similar to Yelp, has a significant database of services, many of which are relevant to travelers, in China and throughout Asia-Pacific.
In the West, the nearest competitor is probably The Culture Trip, a London-based travel media startup focused on giving travelers personalized content and recommendations around culture, food, and travel, that has raised $23 million in funding. It emphasizes curated content over user-generated.
In November, China’s largest online travel agency, Ctrip, acquired Trip.com, the travel recommendation service founded as Gogobot, and that had raised $39 million in funding, and folded the content into travel booking platform Skyscanner.