An Airbnb IPO in the Works
Back in January, the news was flooded with talk of Airbnb planning to IPO in 2020. The world was expecting a strong IPO market in 2020, with expectations and valuations more rational than the previous years (Uber and Lyft). At CNBC’s Power Lunch, Santosh Rao of Manhattan Venture Partners speaks on the topic of Airbnb as the MOST anticipated IPO of 2020. But now, with the growing Coronavirus pandemic and its effect on the tourism industry (and not only), what is going to happen to Airbnb and its IPO plans?
A Little Background Info
Founded in 2008, Airbnb provides a platform that connects people willing to rent out their homes to guests looking for cheap accommodation, collecting a fee of about 15% from guests and hosts. Till date, it has more than 7 million listings in more than 100,000 cities across over 200 countries and regions. It acts as a broker, receiving commission from each booking. The company is based in San Francisco, California, United States. Airbnb was conceived after its founders put an air mattress in their living room, effectively turning their apartment into a bed and breakfast, in order to offset the high cost of rent in San Francisco; Airbnb is a shortened version of its original name, AirBedandBreakfast.com.
Funding received by Airbnb
| Date | Amount raised | Post Money Valuation | |
| Seed | Jan 2009 | $20.0 k | $2.5 m |
| Seed | Apr 2009 | $615.0 k | |
| Series A | Nov 2010 | $7.2 m | $70.0 m |
| Series B – 1 | Jul 2011 | $114.9 m | $1.3 b |
| Series B – 2 | Jul 2011 | $2.1 m | |
| Series C | Oct 2013 | $200.0 m | $2.9 b |
| Series D | Apr 2014 | $519.7 m | $10.5 b |
| Series E – 1 | Jun 2015 | $1.6 b | $25.5 b |
| Series E – 2 | Nov 2015 | $100,0 m | |
| Debt | Jul 2016 | $1.0 b | |
| Series F | Sept 2016 | $1.0 b | $31.0 b |
Source: craft.co
Acquisitions Made by Airbnb
- Airbnb launched its first international office on 31st May, 2011 by acquiring a German competitor, Accoleo.
- Before the 2012 Olympics Airbnb acquired a London based company CrashPadder. This acquisition made Airbnb the largest lodging website in th UK.
- In December 2012, Airbnb announced the acquisition of Localmind, a location-based question and answer platform.
- Airbnb acquired Luxury Retreats International, a Canadian based villa rental company for approximately $300 million in stock and cash in February 2017.
- In February 2017, Airbnb also acquired a social payment startup known as Tilt.com
- On November 16, 2017, the company acquired Accomable, a startup focused on travel accessibility
- In March 2019, the company acquired HotelTonight, a website for booking last-minute hotel rooms, for over $400 million.
- In August 2019, Airbnb acquired Urbandoor, a global online marketplace that offers extended stays to corporate clients.
Airbnb IPO?
Airbnb reported profits up until 2018, when they decided to go for IPO to raise additional funds to support their growing company. The decision to go for IPO in 2020 came with heavy spending on marketing, sales, advertising and R&D. Due to these expenses, the company reported losses in 2019, but this was not a concern for Airbnb, as the company expended in order to promote itself and gain the trust of investors.
The public is now closely following the possible Airbnb IPO, as the company is a profit-making unicorn with a good business model and promising future. However, the main hindrance for Airbnb at this moment is the outbreak and spread of COVID-19.
The company’s major concern today lies in the question – will Airbnb be able to go for IPO in 2020?
Read on to part 2 to hear our opinion.
