Sweetome

Dec 6, 2019

December 6, 2019 Sweetome Group, a shared accommodation operation spin-off from Chinese online short-term lodging rental unicorn Tujia.com, has bought out 100 per cent shares in two domestic vacation rental startups, CityHome and iYOUJIA.com, representing the latest acquisitions to promote a further consolidation in the country’s burgeoning home rental market. Along with the two acquisitions, Sweetome Group also received a strategic investment from New York-listed Chinese online classifieds platform 58.com, China Renaissance announced in a recent statement released on its WeChat official account. China Renaissance, which has advised on a number of high-profile technology mergers and acquisitions in China, served as the exclusive financial advisor of the deal. The two acquisitions “will further strengthen Sweetome Group’s business layout in the urban homestay market, and provide more abundant and high-quality brands for householders and consumers to choose from,” said Luo Jun, co-founder of Tujia.com and Sweetome Group, in the statement. The deals are expected to promote “the chain operation and standardization” of the shared accommodation market in China, he added. Set up in 2011 and spun off from Tujia.com in 2015, Sweetome Group acquired the two domestic vacation rental upstarts as an indirect move to rope in a cluster of their investors, which are all existing and mature players in the market, such as Airbnb and Nasdaq-listed Chinese online travel agency Trip.com. CityHome, which claimed to be the only Chinese homestay brand backed by Airbnb, closed $5 million in a Series A round of financing from the American short-term home rental major in July 2018. The company, started in August 2017 and headquartered in Beijing, provides householders in first and second-tier cities with home design and decoration, home rental operation, as well as cleaning and maintenance services before listing their houses on the CityHome platform. The startup also counts Chinese internet giant Tencent, Fidelity Internationa’s China-focused investment arm Eight Roads Ventures, which was previously known as Fidelity Asia Ventures, and Chinese TMT-focused private equity firm CBC Capital among its institutional investors, shows the company website. iYOUJIA.com was established in February 2018 to serve as a boutique homestay brand under Chinese online short-term room rental business Mayi.com, operating housing resources in 20 first and second-tier cities in the country. The company is led by Shen Zhiqiang, the present CEO of Mayi.com, and James Liang Jianzhang, chairman and co-founder of Trip.com. Trip.com, rebranded from “Ctrip,” delivers a wide range of travel services including accommodation reservation, transportation ticketing, packaged tours, and corporate travel management. Under the close ties with the two travel services providers, iYOUJIA.com raised tens of millions of U.S. dollars in an angel round from Trip.com, Tujia.com and 58 Industry Fund, an investment vehicle of 58.com, in June 2018. The deals could potentially nurture another major player in  China’s home-sharing market, which was valued at 16.5 billion yuan ($2.35 billion) in 2018, up 37 per cent compared to 2017, according to a report released by the National Information Center this July. The market is projected to grow by 50 per cent over the next three years. The country’s home-sharing market is dominated by Tujia.com with a market share of about 60 per cent. Meituan Minsu, backed by Hong Kong-listed on-demand services provider Meituan-Dianping, ranked second. Alibaba’s Xiaozhu and Airbnb, which are almost on par with each other, came third. Sweetome Group now manages over 56,000 apartments, private houses, villas and hotels for more than 42,600 house owners across five sub-brands including Sweetome, JiaTing, HiVilla, GOMO, and WOGO, according to the company website. The company also claims to have cooperation with over 20o local governments worldwide with overseas business expanding across Australia, Canada, Cambodia, Greece, Thailand, the United States, among others. The company completed an investment from Poly Capital, an investment platform of Chinese state-owned conglomerate China Poly Group, in March 2018. Financial details of the investment remained undisclosed.