Danke Completes Series C Funding Round of USD 500 million
Danke, a Chinese-based long term apartment leasing platform, announced today that it has completed a series C funding round of USD 500 million.
March 1st, 2019/EqualOcean/- According to 36kr, Danke, a Chinese-based long term apartment leasing platform, announced today that it has completed a series C funding round of USD 500 million. This round is led by Tiger Global and Ant Financial with participation from Primavera Capital (春华资本), CMC Capital, Gaorong Venture Capital (高榕资本), Joy Capital (愉悦资本).
Tiger Global, CMC Capital (Series B+), Gaorong Venture Capital (Series B & B+), and Joy Capital (from Series A to Series C) have participated in previous funding rounds.
The valuation of Danke will go over USD 2 billion after this round.
Founded in early 2015, Danke Apartment is an internet long term apartment leasing company which aims at using mobile and big data to transform the traditional housing rental industry and providing relatively better housing rental services to white-collar workers in 10 tier 1 and 2 cities including Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Wuhan and so on.
After acquiring Ai Shang Zu (爱上租) earlier this year, it will have around 400 thousand apartments in total.
The current top 1 player in the industry is Ziroom (自如) managing more than 800 thousand apartments.
Messages from its founder:
GAO Jing (高靖), founder and CEO of Danke, said that capital raised from this funding round will be used in the followings:
1. Invest further to update and upgrade AI-based & big data-driven rental system
Purpose: digitalizing the apartment renting process and reducing participation from intermediaries in order to improve transaction efficiency
2. Enhance internal collaborations and cooperations, and actively collaborate with governments
Purposes: increasing operational efficiency and lower costs. For the government side, it will mainly help to stabilize the renting price in the market and ultimately benefit apartment renters.
3. Transform supply chain, improve indoor decoration and furniture; at the same time, come up with service standard in more details
Purpose: improving qualities and customer experiences
4. Align with the government to explore and develop centralized apartments, especially apartments for blue-collar workers
Purpose: winning government support and entering a new niche market to explore opportunities.
The messages from GAO are clear that they will leverage technology to improve operational efficiency and boost user satisfaction and align with governments' policies to stabilize rental prices and serve low-income residents (monthly average: CNY 3-5000) instead of the other way around.
However, whether Danke or other long term rental apartments can bring real benefits by providing blue-collar apartments to low-income residents remains a question. Or it will simply be another way to generate more profit and in fact raise the renting expenses for those low-income residents.
For example, MoFang (魔方), another long term rental apartment brand in China, launched blue-collar apartments called NO.9 Building (九号楼) targeting in Hangzhou in June 2018. The price for its single room is around CNY 3,000 (USD 447), which is notably higher than the market average. For its dorms, the revenue generated per room is also higher than the market average price for a single room, namely higher sales per unit area achieved.