Several corporate-backed companies in China’s travel and consumer startup space have shut down due to the lockdown related to the coronavirus, KrAsia reported on Tuesday.
Founded in 2019, Wujiang Hotels operated five hotel brands that spanned eight Chinese cities. It had $30m in registered capital after raising money from online travel agency Trip.com, but chairman Ma Xiaodong said in an internal announcement that it is unable to continue operating.
Online travel booking platform Baicheng had been founded in 2000 and had received $20m in a 2014 series B round featuring e-commerce group Alibaba according to KrAsia, which cited information from deals database Tianyancha.
The company floated two years later but declared bankruptcy in late February this year after its income completely dried up.
Meili Jinrong, the automotive-focused spinoff of consumer loans provider Meiliche also shut down operations last month and has laid off all its employees. The Covid-19 restrictions all but eliminated sales which, combined with an immediate cash shortage, meant it had no choice but to close.
The move came after the company had raised more than $200m as of 2018, from investors including conglomerate New Hope Group, personal finance app developer Wacai, e-commerce firm JD.com’s JD Finance affiliate and Bertelsmann Asia Investments, representing media group Bertelsmann.
China is thought to be the country where the disease originated, and it bore the brunt of the early deaths and restrictions. Those restrictions are slowly beginning to be lifted in parts of the nation but it is unclear when normal operations in many consumer industries will be able to resume.
