Cloud Computing, Internet Datacenters and Big Data Business Intelligence from China

With China’s Travel Sector Possibly Depressed, What Will Do With Investment Money?

With worries that the new bird flu outbreak could constrict the Chinese travel sector, tourism company has plowed ahead and closed its latest investment round, gaining USD57 million from, Hillhouse Capital, and GGV Capital.

The three investors will each invest USD19 million in The investments were decided in March 2013. However, the full valuation of has not yet been disclosed.

Chinese search engine Baidu and GGV Capital are both former investors of In November 2009, GGV Capital invested USD15 million in the Chinese tourism website; while Baidu invested USD306 million for a stake of 62.01% in July 2011, making it a controlling shareholder of

In recent weeks, a new strain of bird flu called H7N9 has killed more than 60 people. Some Chinese cities have suspended live poultry sales to contain the problem, and hotels and airlines are on the lookout for signs that travelers may spread the illness. When SARS affected China in 2003, hotels, trains, and airlines were all hit as tourists failed to travel and businesses closed.

Baidu’s investment in is reportedly because of two reasons. On one hand,’s business is close to Baidu’s core search engine focus; and on the other hand, from the financial investment perspective, Baidu hopes to gain profit from a possible IPO of In addition, has a strategic meaning for Baidu. The Chinese search engine company expressed its interest in’s positive performance on mobile devices. According to Zhuang Chenchao, chief executive officer of, in 2013, about 20% of bookings on were completed via mobile devices.

However, this new round of investments may lead to the postponement of the company’s IPO. At the end of 2012, rumors about’s IPO spread widely on the Internet. Due to the depression of the American IPO market and the uncertainty of the Variable Interest Equity Entity structure, temporarily gave up the IPO plans. If the VIE issues are ever resolved, and if the markets look favorably again on the seemingly-dark accounting practices of Chinese technology companies, Qunar may push ahead with the IPO.

2 Comments on "With China’s Travel Sector Possibly Depressed, What Will Do With Investment Money?"

  1. BIDU has more to worry about then wether the travel search company is facing avian flu because they are expanding in a country that represses speech so how good can the product really be in the search engine when they stop free speech and do not allow posting dissident information.

  2. Short! There is no other choice on BIDU but to short. Too much competition in the pipes are coming up to squash all their higher prices expectations.

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