Chhavideep SinghZiroom is a home rental services company that also provides property management services. The company is headquartered in China and recently, it has bought 100% stake in rival company, Bestbond to strengthen its grip on the Chinese rental market.
How is this acquisition beneficial to Ziroom?
This acquisition will bring a significant change in the rental market of China with Ziroom being the country’s largest housing rental platform. This acquisition of direct rival, Bestbond will strengthen the company’s grip over the Chinese housing rental sector giving it a more dominant position than before.
Ziroom will capitalise on this opportunity by adopting a multi-brand strategy to provide its customers with more choices. Through this, the brand aims to expand its network across China, as mentioned by Ziroom in a statement.
Source: Warburg Pincus
Reports confirm that Ziroom will continue to run its centralised apartment business model with additional resources that came in from Bestbond, strengthening its operational network. The program is said to be active in over 50 cities across China, in Shanghai, Shenzhen, Guangzhou and Beijing amongst many others.
In 2019, Ziroom bagged over USD 608 million which loosely translates to 4 billion yuan in its Series A funding round led by Sequoia Capital (China), Tencent, Warburg Pincus and other existing investors.
The housing rental start-up concluded its Series B funding round with USD 500 million which was led by General Atlantic.
In November last year, the company also received over USD 1 billion funding from multinational investor, SoftBank.
Flipping the coin, the acquires start-up Bestbond was founded back in 2013 and goes by the legal name, Jiangsu Beikebang Investment Management Company Ltd.
The company is an operator of chain boutique long-term rental apartments, majorly targeting white-collar workers. According to reports, it manages over 5,000 rooms and 30 apartments in Tier 1 and Tier 2 cities in China including Suzhou, Beijing and Shanghai.
Source: Amerlish
Back in 2017, Bestbond received funding worth USD 19 million in its Series B funding round led by Everyday Network. This funding valued the company very close to $1 billion and concluded the valuation at a little over USD 95 million.
Other housing rental players in China include Danke Apartment and Beike Zhaofang.
Danke Apartments bagged over USD 130 million in January this year, but as the COVID-19 Pandemic struck, the company’s business struggled to make ends meet. According to sources, the company is operating in loses with its former CEO being a subject of a government probe.