Shanghai-listed travel agency China CYTS Tours Holding Co has teamed up with Sequoia Capital China and IDG Capital to set up the CYTS Hongqi Fund to invest in innovative travel startups. However, the fundraising target for this vehicle was not identified in CYTS’s filing.
The three parties also founded a fund management company to run the fund, according to China Money Network, reporting that each party will send one representative to join the board of directors.
“With the change of population structure and expansion of the middle class, Chinese consumers are becoming more demanding for the quality of their food and beverage, entertainment, culture, sports and tourism,” said Wang Cen, a partner at Sequoia. “With the tourism industry’s continued upgrade to meet new demand, innovative travel start-ups will be founded and this fund attempts to benefit from this trend by combining a tourism industry leader with venture capital experts.”
China National Tourism Administration earlier announced to spend RMB2 trillion ($290 million) during 2016-20 to promote the country’s tourism industry, which was reported to generate the revenue of RMB4.13 trillion ($600 billion) and accounted for 4.9 per cent of China’s gross domestic products in 2015.
Sequoia previously invested in some travel startups such as travel information and social networking website Lvmama, online travel agency Tuniu Co and Yaochufa.
Meanwhile, around 36 companies in IDG Capital’s portfolio, including artificial intelligence startup SenseTime, online video platform Bilibili and e-commerce Mogujie raised the funding last year. Of that, the 15 companies it backed had the valuation of $1 billion or more in 2016, taking the total number of unicorns in portfolio to 26.