China: Rental start-up Ziroom has secured $620 million of investment led by private equity firm Warburg Pincus.
Other participating investors include Tencent, Sequoia Capital China, China Renaissance, Principal Investment, Sunac Capital, GA Capital, H Capital, Source Code Capital,
Haixia Asset and New Hope.
Ziroom CEO Xiong Lin said, the proceeds 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.
Ziroom was founded in 2011 by a team of senior professionals from HomeLink, the largest real estate agency in China, and was spun-off from the group in 2016. It manages 500,000 rooms and serves 1.2 million tenants in nine cities around China as well as operates eight service apartment buildings.
The company plans to increase the number of rooms under its management to 800,000 this year.
“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.
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 centralised 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.