Ant Financial leads funding for rental housing startup Danke
Ant Financial, Alibaba’s payment and financial technology arm, has invested in mainland rental housing platform Danke Apartment in a funding round it co-led with existing investor Tiger Global Management.
The completion of the US$500 million Series C funding round takes Danke's valuation to over US$2 billion. Primavera Capital as well as returning investors Hillhouse Capital, Joy Capital, and CMC Capital also participated in the financing round.
With a mission to provide more affordable housing for young Chinese in large cities, Danke, whose name means “eggshell” in Mandarin, takes a dorm-like approach to high-end apartments that have been remodeled and furnished.
It typically slices up houses for three to four people into smaller units to rent out via its online platform, while taking care of the housekeeping and maintenance duties.
Chinese media reported that the average rent for a single room on the platform is 2,600 yuan (US$387.88) a month. Danke manages over 320,000 apartment units in 10 first-tier cities, including Beijing, Shanghai, Shenzhen, and Hangzhou.
One of Danke’s competitive advantages against competitors Ziroom and 5I5J is its use of artificial intelligence-driven algorithms for its online platform. In rental transactions, the platform takes into account various market factors such as the location of the unit and other data to establish rental rates and speed up the decision-making process, Danke said.
In a press statement, the four-year-old startup said the fresh capital will be used to invest in an AI-powered house rental data system to boost its efficiency.
It also seeks to reduce costs and enhance its supply chain to improve the quality of its apartment amenities and tenant experiences. The money will also enable Danke to explore the emerging housing market for blue-collar workers.
Gao Jing, Danke’s founder and chief executive, said in a statement that the company would continue to “respond to government calls to stabilize rent levels and promote the healthy development of the rental market”.
Ant Financial sees Danke as part of a strategy to modernize China’s rental housing market, Jin Gang, vice president and head of strategic investment at Ant.
At present, Jin said the industry suffers from mismatched information, low-quality listings and frequently fractious landlord-tenant relationships.
Meanwhile, Danke has been slammed for its practice of converting tenants’ payable rents into financial loans without notice. This means the firm takes out “rental loans” from banks and other lending institutions in the name of its tenants.
As a result, Danke receives a year of rent from the loan and pays the landlords monthly. It could use the excess cash as working capital to expand business and renovate the property.
In effect, the tenants are paying back the loan, instead of paying rent, and are also burdened by the loan interest.
On the other hand, Danke stressed that the excess cash generated by this practice enables it to lower deposits for cash-strapped young tenants.
– Contact us at [email protected]
BN/CG
-
Who will be the next CE? Ben Kwok
Who will grab the top job to lead Hong Kong past the 25th anniversary of its return to China? All eyes will be on the possible candidates including incumbent Carrie Lam Cheng Yuet-ngor, her
-
HK migrants find mixed fortunes in Britain Mark O'Neill
Michael Leung and his family were fast asleep in the house they had recently bought in the Midlands of England. He heard glass crashing on the ground floor and went to investigate. When he reached
-
The Penny’s Bay fear Ben Kwok
Good times don't last but bad times don't stay forever either. Spare a thought for the Hong Kong restaurants and bar operators. After a happy December, they are back to dinner ban that happened the
-
National Geographic,Swire partner to promote marine conservation
The Swire Group Charitable Trust (“Swire Trust”) and National Geographic Creative Works are joining hands to launch the first website of its kind dedicated to Hong Kong’s marine ecosystem under the
-
Winning a Mark Six jackpot under the fifth wave Ben Kwok
Who doesn’t want to win the Mark Six jackpot? It is this time of the year that we dream about becoming rich and think about how to spend it like the property tycoons. To kick off 2022, Hong Kong
Private credit assets as catalysts for climate impact
China’s ageing population and structural solutions
Lots of optimism in checkout technology
Who will be the next CE?
A pro-family agenda for America starts in California
Why inflation is not a threat to REITs
Cryptocurrency in divorce proceedings
On “Dismantling Global White Privilege”-Chandran Nair
