Tencent Bets Big on Ctrip-Backed LvYue Hotel Group: Travel Startup Funding This Week

Travel Startup Funding This Week

Each week we round up travel startups that have recently received or announced funding. Please email Travel Tech Reporter Justin Dawes at [email protected] if you have funding news.

This week, travel startups announced hundreds of millions of dollars in funding.

Earlier this week, we reported that Traxo, a travel startup, has raised nearly $10 million in funding in a round not yet closed. Airlines Reporting Corporation (ARC) led that stake. Traxo helps track and manage itineraries in corporate travel and provides other data services.

>>LvYue, a Beijing-based hotel operator and software developer, has secured a Series A round of financing of an undisclosed amount equal to “several hundred million U.S. dollars.” The travel information technology group has built a hotel reservation platform, and it manages some hotels under seven soft brands including the premium brands Floral and Arula.

Tencent led the round. Sequoia China, Baidu Capital, Goldman Sachs, Ocean Link (Trip.com Group’s investment arm), Caissa Travel, and others also participated.

“LvYue is a direct incubator investment of Ctrip and an important component of Ctrip’s internationalization strategy,” said Trip.com Group CEO Jane Sun in a statement. “Through data-driven operation and technology-driven development, LvYue Group has become a leading force in Ctrip’s globalization strategy.”

Founded in 2016, LvYue stood out early by creating its own property management system, XPMS, which it built from the start to run on the cloud and be able to handle different types of accommodation, not merely hotels. The system helps manage room inventory, distribute room inventory and rates on online and offline channels, and set prices in response to changes in supply and demand.

LvYue operates hotel brands, with six brands covering various types of hotels, from Floral the boutique hotels and resorts, Arula a premium brand, and Suoxing an economy choice. It runs about 1,900 hotels in 10 countries including China, Japan, South Korea, Thailand, and India.

LvYue is betting that the spread of brands that happened among hotels in the West in the past few decades will also happen in Asia. Brands can buy things like mattresses at volume discounts and can ensure consistent brand standards for consumers. Three out of four of China’s guest rooms have no brand, for example, compared to only one in three in the U.S., according to the School of Tourism Science at the Beijing International Studies University.

Earlier this year, Tencent led a $250 million investment in Chinese travel site Mafengwo, which provides online travel content somewhat similar to TripAdvisor. Weeks ago, TripAdvisor and Trip.com Group entered into a global joint venture.

>>Bungalow, a real estate and property management company, has raised $32 million in Series B funding.

Founders Fund and Coatue co-led the round.

The San Francisco-based business leases unused residences in U.S. cities that face housing shortages, furnishes the units, and then fills them with young roommates. It offers co-living services to support community building.

>>TravelTriangle, which brings travelers and agents together for online sales of vacation packages, has raised $13 million in a Series D round of funding.

KB Global Platform and the Fundamentum Partnership Fund I, backed by billionaire Nandan Nilekani, co-led the round. SAIF Partners, Bessemer Venture Partners, and RB investments also participated. Inc42 first reported the news. In October, InnoVen Capital invested $3 million.

Founded in 2011, the Gurgaon, India-based startup has raised at least $40 million to date.

TravelTriangle likens itself to a customer relationship management system for travel agents. It said it has nearly 1,000 “active travel agents.” It has agents bid for business, letting the traveler choose the best itinerary. TripHobo and TripFactory are among its rivals.

Skift Cheat Sheet:
We define a startup as a company formed to test and build a repeatable and scalable business model. Few companies meet that definition. The rare ones that do often attract venture capital. Their funding rounds come in waves.

Seed capital is money used to start a business, often led by angel investors and friends or family.

Series A financing is typically drawn from venture capitalists. The round aims to help a startup’s founders make sure that their product is something that customers truly want to buy.

Series B financing is mainly about venture capitalist firms helping a company grow faster. These fundraising rounds can assist in recruiting skilled workers and developing cost-effective marketing.

Series C financing is ordinarily about helping a company expand, such as through acquisitions. In addition to VCs, hedge funds, investment banks, and private equity firms often participate.

Series D, E and beyond These mainly mature businesses and the funding round may help a company prepare to go public or be acquired. A variety of types of private investors might participate.

Check out Skift’s Top Travel Startups to Watch in 2019, here.