Ziroom, a Chinese apartment rental service provider, raised 4 billion yuan ($621 million) from a group of investors including private-equity firm Warburg Pincus, as Beijing pushes the growth of a rental market to curb skyrocketing home prices in large cities.

Warburg Pincus led the Series A round, in which Sequoia Capital, Tencent Holdings Ltd. and seven other firms were also investors.

Continue Reading Below

Beijing-based Ziroom leases apartments from individual owners, renovates the spaces and then subleases them to renters. It manages 500,000 rooms in nine Chinese cities, including Beijing, Shanghai and Shenzhen.

Ziroom's fundraising follows a wave of recent government policies supporting a larger rental-housing supply. The government has also been promoting the idea that "homes are for living in, not for speculation."

"We are actively responding to the government's policy to promote apartment leasing by providing more and better rental properties to the market," said Hui Zuo, Ziroom's chairman, in a statement.

Warburg Pincus has been gradually increasing investments in Chinese rental-housing companies. In 2012, the firm invested in Mofang, an apartment developer targeting young professionals in big Chinese cities. Three years later, the firm co-founded Nova, a company that acquires and converts old distressed properties into rental apartments and shared offices.

(END) Dow Jones Newswires

January 16, 2018 04:14 ET (09:14 GMT)