As the number of Chinese technology ventures valued at more than $1 billion continues to increase, a frequently asked question is whether those startups are getting overvalued. Is there a tech bubble that is waiting to burst?
At the Converge tech conference Thursday, a co-founder of a Chinese billion-dollar startup made a case for optimism on the future of China’s tech startup scene.
“Valuations are for the future. People are confident about the future of China,” said Melissa Yang, cofounder and chief technology officer of Tujia.com, a vacation home rental startup often described as China’s answer to Airbnb of the U.S.
Tujia recently raised about $250 million in its latest funding round that valued the company at more than $1 billion, according to people familiar with the matter. Its existing investors include GGV Capital, Lightspeed China Partners, Qiming Ventures, CBC Capital and CDH Venture, as well as U.S. vacation-rental service firm HomeAway.com and Chinese online travel company Ctrip.
Even as the recent volatility in China’s stock market has raised concerns about potential ripple effects in the country’s booming startup scene, Yang said Tujia hasn’t felt any impact. “So many potential investors want to meet us,” she said. Yang also said Tujia hasn’t yet considered an initial public offering.
Yang said China’s startup scene is vibrant in part because the government has been increasingly encouraging entrepreneurship. The success of homegrown Internet firms like Alibaba Group Holding has also inspired younger generations of startups, she said.
Like Airbnb, Tujia connects property owners with travellers looking for alternatives to hotels. But Tujia’s business model also includes a broader range of services, including inspecting and cleaning properties while making sure photos and descriptions of properties are accurate. Yang said such additional services help Tujia cope with the general lack of trust among Chinese consumers. Its website features more than 200,000 properties in over 200 travel destinations across China. The company also offers vacation homes in overseas destinations such as Bali, Phuket and Tokyo for Chinese outbound tourists.
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Article: Wall Street Journal