China's largest short-term rental platform said in a statement on Wednesday that the fundraising meant it was now a "unicorn startup", a venture capitalist term referring to firms that hit valuations of more than $1 billion, and is looking to compete with Airbnb and the other major Chinese platform Tujia.com.
China's fast-growing middle class is driving the growth in short-term rentals, in one of the few markets where Airbnb is finding growth difficult. Hong Ge, Airbnb's China head, left his role after just four months recently, leaving co-founder Nathan Blecharczyk, who serves as chief strategy officer, to assume a new role as chairman of Airbnb China.
Xiaozhu chief executive Kelvin Chen Chi said: "In terms of proving a business model that works in China and growing it to scale, this can only be done by a local company, though foreign firms may win a portion of market share."
He added that his company was open to working with other companies either in China or overseas: "We don't rule out the possibility of working with any overseas platforms, including Airbnb. We are open to cooperation in the China market, so it depends on how the other side views us."
Xiaozhu has listings in more than 400 locations globally and raised $65 million last November. Existing investors include Joy Capital, Morningside Ventures and Capital Today.