SoftBank becomes largest backer of Beike in $2.4b series D+

Real estate platform Beike has secured over US$2.4 billion in its series D+ financing round, which was closed in November 2019, the company confirmed with local media Tencent News on Wednesday. Having poured in US$1 billion, SoftBank became the largest backer in this round.

Other participants include Tencent, Hillhouse Capital, and Sequoia Capital.

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The fresh funding will be used for tech research and development, product innovation, and talent recruitment, said the firm. Beike will have a valuation of US$14 billion after this round.

Beike was founded in April 2018 after real estate brokerage Lianjia, already dominant in large cities such as Beijing, refocused and rebranded its online business to connect property agents and property seekers across the country. Prior to this round, Beike had closed a US$1.2 billion series D financing round in July 2019, in which Tencent injected US$800 million, according to a 36Kr report.

As of December 2019, Beike had expanded to 106 Chinese cities, counting more than 235 real estate brands, 38,000 brick-and-mortar brokerages, and 360,000 brokers on its platform.

The company was reportedly aiming for an initial public offering in Hong Kong this year, targeting a value of US$20 billion to US$30 billion.

China’s real estate market has seen an upsurge in sales in recent years. Data from the National Bureau of Statistics show that sales of residential properties have grown to 13.94 trillion yuan (US$2.01 trillion), up 10.3% year on year, double the sales figure of 6.24 trillion yuan in 2014.

With an eye on the online Chinese real estate market, SoftBank also invested another US$1 billion via its Vision Fund into Chinese apartment rental platform Ziroom, also an offshoot of Lianjia. The Vision Fund directly injected US$500 million and bought an additional US$500 million shares from Ziroom founders, The Wall Street Journal reported.

These two investments came at a time when Softbank’s Vision Fund has been criticized for a series of recent investment missteps. It has previously injected US$2 billion to US office-sharing company WeWork in January 2019, which failed its IPO in September and had to be bailed out with a US$9.5 billion rescue package. Another portfolio company, Indian hospitality giant Oyo, will reportedly have a massive layoff of over 5,000 employees globally.

SoftBank posted an operating loss of US$2.1 billion from its US$100 billion Vision Fund for the three months ended December 2019.

This report was first published on KrAsia.