According to reports from Bloomberg, Airbnb Inc. is in serious talks to acquire China’s Xiaozhu.com, which is one of its biggest rivals in the world’s second-largest economy.
Xiaozhu currently has $150 million in the bank, more than 100,000 listings across 300 cities across China, and approximately 10 million active users. Airbnb’s numbers in China aren’t quite as impressive. It has approximately 75,000 listings and recently announced it plans to expand to 300 employees in the country.
Both companies trail Tujia, which has nearly $500 million in the bank and 450,000 listings across a number of different markets, not just China. The three rivals are in a fierce fight for market share that looks unlikely to ease up. It makes plenty of sense for the two smaller rivals to team up.
An insider with knowledge of the talks said they are advanced in nature, and a deal is likely. No financial terms have been released.
This isn’t the Airbnb’s first attempt to get bigger in China. It recently signed a deal with Tencent Holdings Ltd., which is the owner of the popular Chinese messaging service WeChat. Approximately 60-70% of Airbnb’s China logins come from WeChat’s 800 million active monthly users.
Airbnb is flush with cash. It raised $555 million in a funding round in September, with the potential to eventually reach $850 million. The company was valued at $30 billion at that time. It certainly has the financial ability to make a big splash in China.
