(Sept 28): One of Airbnb’s biggest Chinese rivals is in talks with Singapore’s sovereign wealth fund and other investors for more than US$200 million ($274 million) in new funding to take on the American home-sharing giant, according to people familiar with the deal.

Beijing-based Xiaozhu.com, said to have been a potential acquisition target for Airbnb in 2016, lets users rent and host homes and apartments across the country. It’s now targeting a valuation greater than the US$1 billion it hit in November, but those figures could change as discussions are still underway, said the people, who asked not to be identified talking about a private deal. Singapore’s GIC is considering an investment in a round that’s already oversubscribed, they said.

The deal comes on the heels of a US$1 billion infusion for India’s Oyo Hotels, much of which will bankroll an expansion in China. The country’s home-stay market is surging thanks to middle-class consumers seeking novel accommodation and ample capital provided by its biggest technology giants. Xiaozhu’s partnered with e-commerce leader Alibaba Group Holding while Tencent Holdings and Ctrip.com International back its biggest homegrown rival, Tujia.com.

Both Chinese players represent formidable competition for Oyo and Airbnb, which is banking on the country generating much of its future growth. Airbnb is marketing China as a destination by touting unique local experiences, while also trying to get travelers from the world’s No. 2 economy to use its service abroad. Setbacks in Japan, Hong Kong and other markets have increased the need to make its business work in the mainland, where it’s built a local engineering team and abided by controversial laws that mandate storing data in-country. It’s gaining traction: Chinese listings on Airbnb have grown more than 125% in the past year and the number of Chinese guests doubled in 2017, the company said in July.

Xiaozhu’s business model hews closest to Airbnb’s. Beyond traditional accommodation, it also offers services that help homeowners improve the look and feel of property for would-be renters. Its other existing investors include Yunfeng Capital, which is backed by Alibaba co-founder Jack Ma, Legend Capital, Morningside Venture Capital, MSA Capital and Capital Today.

GIC had no immediate comment, while Xiaozhu declined official comment. In a July press release, the Chinese company said it had 35 million active users with over 420,000 listings in 652 cities globally. It’s tied up with Alibaba’s travel service -- Fliggy -- on promotion of properties and bill settlement.