The capital will be used to accelerate the digitization of the residential industry and improve the efficiency of China's residential services.
Image credit: Ethan Wilkinson/Unsplash
On March 4, Beike officially confirmed that the company had completed a D+ round of financing in November 2019. The participants included SoftBank, Tencent, Gao Ling and Sequoia, with a total financing amount of more than USD 2.4 billion. It is reported that SoftBank led this deal, with an investment of USD 1 billion.
Beike is the leading real estate brokerage platform in China, launched by Lianjia in April 2018. "Beike aims to create a win-win marketplace for all agents, brokerage brands, and franchise stores," the firm's CEO Peng Yongdong told EqualOcean. "We serve the industry with our Agent Cooperation Network."
Beike was established to make listings and transactions more transparent in China's real estate industry. Lianjia had created a "real estate dictionary" of over 187 million houses in more than 450,000 communities and 325 cities, covering more than 90% of housing in tier 1 and tier 2 cities – this forms the most valuable legacy that Lianjia left for Beike. This data and information center will be the basis of establishing a marketplace for participants.
Compared to the leading real estate information platform in the USA, Zillow, they both leverage real and transparent data. The different situations in the real estate industries of China and the USA mean that their data resources are varied. The USA's MLS system can share data about listings and buying demand information, while in China real estate agents get data themselves. So the blank market provides a chance for Beike, and its goals are really close to the MLS system, to achieve win-win places for the participants.
Beike's goal concerns not only data, just as the MLS system is not only focused on providing data to customers. MLS integrates different real estate brokerage companies into a franchise system in the form of a member alliance. This is also the goal of Beike as a platform, to integrate agents, brokerage brands and franchise stores.
While Beike's aim is ambitious and it has been seen as a leader, China's Internet industry has experienced the 'cold winter' and the strictest round of real estate regulation. And after the real estate industry was adversely affected in 2019, 2020 and coronavirus epidemic just made the situation worse.
According to Bloomberg's report in December 2019, Beike is likely to launch an IPO in 2020. Since Softbank took a hit through its investment in WeWork – the value of which fell from nearly USD 40 billion to nearly USD 8 billion – the Japanese bank urgently needs projects that can quickly make money through IPO.