Ziroom, the China-based operator of an accommodation rental services platform, has secured RMB4bn ($621m) in a series A round featuring internet group Tencent, the Wall Street Journal reported yesterday.
The round was led by private equity firm Warburg Pincus and included venture capital firm Sequoia Capital and seven undisclosed additional investors. It valued the company at $3.1bn, sources close to the matter told Caixin Global.
Founded in 2011 by Homelink, the real estate agency also known as Lianjia, before being spun off in 2016, Ziroom leases apartments from their owners and rents them on to tenants it attracts through its online platform once it has carried out renovation work on the properties.
The company managed roughly 500,000 rooms spread across nine Chinese cities as of the end of 2017 but intends to grow that figure to 800,000 this year as the Chinese government looks to strengthen the rental market in order to offset rising house prices.
Ziroom is also bringing in a credit rating system to replace deposit schemes that can often prove cumbersome to Chinese renters, who can reportedly end up paying up to five months worth of rent to cover deposits and agency fees.
The series A capital will be used to increase the number of rooms and properties overseen by Ziroom as well as enhancing its support services, boosting its technology and training its workforce.