Travel website Mafengwo, which specialises in bespoke travel, has completed a $250 million round of funding led by Tencent.
General Atlantic, Qiming Venture Partners, Yuantai Investment Partners Fund, NM Strategic Focus Fund and eGarden Ventures participated in the round.
Mafengwo has raised funds at a steady pace since it was founded in 2010. It has completed a funding round every two years and had raised more than $153 million by November 2017. There are big names on its list of investors including Temasek, Hillhouse Capital, Qiming, Capital Today, Hopu Capital and others.
“We will provide better travel options for Chinese tourists,” chief executive Chen Gang said in a statement. “We want to IPO in one or two years and become the biggest travel site in China.”
Chinese travel sites have evolved in the past decade, from merely providing ticket and hotel bookings to information exchange and customised experiences. With the younger generation travelling more, people have higher demands on their trip and ask for more unique content.
Mafengwo started as a bulletin board system, where users could ask for travel tips. It then expanded its business into destination services, visa application, and ticket booking.
This could pose some challenges to online travel agencies such as Ctrip. In an earlier interview, Chen referred to Ctrip as "our upstream partner", but Ctrip has since lost its shine. Chinese tourism has changed from a seller’s market to a buyer’s market. And Mafengwo’s rise should be seen in the light of catering to the different needs of its customers.
Proceeds from this round of funding will be used to upgrade the company's data processing, for marketing and for its service providers, Chen said.
Investment in customised travel services are popular with investors. Alibaba invested in Taiwan-based KKday last November, and Hong Kong-based online travel agency Klook raised $225 million from investors like SoftBank and Sequoia Capital only a month ago.
With the rapid increase of GDP per capita across Asia, travellers are looking out for unique experiences and better service during their trip. Chen did admit that customised travel is difficult to scale up, but for a modern entrepreneur, this problem can be solved by advanced technology. Investors will focus on those companies which face up to the challenges and solve them, Chen said.