(Bloomberg) -- Airbnb Inc.’s Chinese rival Tujia is in talks to raise more than $300 million, putting pressure on the U.S. home-sharing startup less than a month after it officially debuted in the country.
Tujia Holdings is one of China’s biggest platforms for property owners seeking to turn their homes into temporary lodgings. It has 400,000 listings plus another 300,000 on its low-cost platform Mayi, as well as more acquired from travel giant Ctrip.Com. By comparison, Airbnb had 80,000 properties in China as of 2016.
Zhuang Hai, Tujia’s president, said the company is on track to raise at least $300 million at a valuation of more than $1 billion in as soon as a month. The business will also split, with 1,000 employees remaining on the home-sharing side of the business, while 2,000 workers will be part of Sweetome, its professionally-managed property unit. Details are still subject to change because discussions with investors are still underway, he said.
“We don’t really need that much money but we’re separating our online and offline business,” Zhuang said, adding that Tujia’s cash burn rate was relatively low. “So we want to reevaluate as we become two companies, so we’re getting investors on to value those two branches.”
Tujia’s new streamlined strategy comes at a critical time for Airbnb, which has committed itself to expanding rapidly across Asia. Brian Chesky launched Airbnb with a new Chinese name, Aibiying, during a glitzy event in Shanghai last month. But much like Uber Technologies Inc., which sold its operations after burning through billions of dollars, Airbnb is entering a market with cashed-up rivals backed by web giants.
Zhuang said the money would go towards expanding products and properties in China and abroad. He singled out Japan as a market that was ripe for expansion thanks to strong interest from Chinese travelers and changing regulations that could make home-sharing easier.
With assistance from David Ramli, Lulu Yilun Chen