Baidu, Hillhouse Capital, and GGV Capital have invested a total of $57 million in Chinese travel site Qunar, according to a report by First Financial Daily (link via Google Translate). The news comes as Qunar weathers a boycott by third-party service providers triggered by a change in its operational and pricing policies. South China Morning Post writer Doug Young speculates that Qunar might have hiked its prices in a bid to increase revenue and profits before making its first public filing for an offering.
A spokesman for Baidu said that the company is not currently commenting on the First Financial Daily report.
The $57 million round was reportedly closed in March, but the current valuation of Qunar is not clear yet. Both Baidu and GGV Capital are already investors in Qunar. Back in November 2009, GGV Capital led an investment round of $15 million that included Mayfield Ventures, GSR Ventures and Tenaya Capital. In July 2011, Baidu became a majority shareholder in Qunar when it invested $306 million. The round valued Qunar at about $483 million, according to First Financial Daily.
For Baidu, investing in Qunar allows it to expand its offerings beyond its core search business and better compete with rivals Alibaba Group and Tencent (which made an investment in online travel company eLong before the Baidu-Qunar tie-up). After its July 2011 investment, Baidu also integrated Qunar’s search results into Baidu’s travel vertical. The deal was seen as important not just for the two companies, but because it also marked a turning point for Chinese startups, which had previously focused more on IPOs instead of acquisitions. At that time, Qunar CEO Zhuang Chenchao said that the cash would be spent developing new services like a hotel search and mobile apps.
The newest reported investment–and current boycott–means that investors will probably have to wait for Qunar’s initial public offering. First Financial Daily reports that rumors had previously placed the timing of the IPO at the end of next year, but other factors contributing to a delay could include a tougher market for Chinese IPOs and an increase in scrutiny by Chinese regulators for companies seeking to list on the country’s two stock exchanges.