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Startup “Ziroom” – Chinese Apartment Rental Service Provider has raised 4 Billion Yuan ($621 Million USD) in a Series A Funding Round Led by Warburg Pincus
Sequoia Capital and Tencent also invest in the apartment rental service provider
BEIJING— Ziroom, a Chinese Apartment Rental Service Provider. Founded in 2011, Beijing-based Ziroom leases apartment units, renovates them and subleases them to long-term tenants. It manages 500,000 rooms and serves 1.2 million tenants in nine cities around China. It also operates eight service apartment buildings. The company plans to increase the number of rooms under its management to 800,000 this year.
Ziroom has raised 4 billion yuan ($621 million USD) in a Series A funding round led by a group of investors including private-equity firm Warburg Pincus, Tencent, and Sequoia Capital China, according to a statement released by Warburg Pincus, as Beijing pushes the growth of a rental market to curb skyrocketing home prices in large cities.
“Ziroom is China’s biggest professional asset management firm, and has advantages in customer acquisition, big data application and rental management,” said Julian Cheng, managing director and co-head of China at Warburg Pincus. “After interviewing hundreds of tenants, we found Ziroom’s reputation is higher than the industry average.”
Proceeds from the funding will be used to expand the company’s existing businesses in Beijing, Shanghai and Shenzhen, as well as adding new operations in cities such as Hangzhou, Wuhan and Guangzhou. It will also upgrade its services to include maintenance and house moving as well as invest in technologies such as smart furniture and big data, according to its CEO Xiong Lin.
This is the third investment made by Warburg Pincus in China’s institutional apartment rental sector. It invested in Mofang, China’s first and leading centralized institutional apartment developer-operator, in 2012, and co-founded Nova to focus on the acquisition of aged and distressed properties in urban infill locations in 2015. The Chinese government has been pushing for the development of the country’s home rental market to address urban newcomers’ housing demand.
With government backing, the sector is attracted increased investments. Last September, Warburg Pincus committed a US$183 million follow-on investment into Nova Property Investment Co. Ltd, a Chinese rental apartment operator and asset manager. Last July, IDG Capital and Chinese hotel management company Huazhu Hotels Group Ltd. led a US$50 million pre-A round in Chengjia Apartment, an apartment rental start-up.
The Chinese government has been pushing the development of the home rental market to address housing demand from urban newcomer. Last August, 12 major cities in China introduced pilot programs that allows tenants of rental properties to enjoy the same access to public services as property owners.
“We strongly believed in the growth potential of apartment rental sector since six years ago and remain committed. We are actively responding to the government’s policy to promote apartment leasing by providing more and better rental properties to the market,” Ziroom chairman Hui Zuo said.
The Chinese government has been pushing for the development of the country’s home rental market to address urban newcomers’ housing demand.
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