1. Have you ever used airbnb when you traveled abroad? Describe your experience.
2. Do you think sharing economy like Uber or Airbnb should be legal?
Airbnb has just raised another $100m, at a time when Silicon Valley’s largest start-ups are racing to fill their war chests, with Uber and Lyft also tapping investors for funds.
The new money is a follow-on addition to Airbnb’s fundraising round in June, which was one of the biggest equity investment rounds for a private technology company. That round raised $1.5bn from investors including Beijing-based Hillhouse Capital, General Atlantic, and Tiger Global, at a valuation of $24bn.
Airbnb’s news comes at a time when other high-profile start-ups are also seeking more funding, with Uber aiming to raise $1bn before the end of the year, and Lyft targeting $500m. However Silicon Valley is facing growing investor scepticism over the sky-high valuations awarded to unprofitable start-ups. This trend was highlighted by Thursday’s public offering of Square, a payments company whose generous valuation in private markets was not sustained when it went public.
Part of Airbnb’s pitch to investors is that it expects to reach profitability next year, said a person familiar with the matter, a goal that stands in stark contrast to the lossmaking, growth-focused model of many tech start-ups.
The new money brings Airbnb’s total funds raised to just over $2.5bn, a war chest it has been using to recruit new hosts and guests, and expand to 190 countries.
Lex
It is all over. Tech bubble 2.0 has burst. Square priced its initial public offering below the range, at only $9 compared with a proposed $11-$13. Not even Goldman Sachs could sell this thing. Call in the removal trucks. San Francisco is done.
However the $100m follow-on is much smaller than Airbnb’s previous three fundraising rounds, leading observers to suggest the focus of the deal was to bring in new strategic investors.
“At $100m it’s unlikely they were doing it for the money,” said Sohail Prasad, chief executive of Equidate, a firm that transacts shares in private companies. “It’s very likely that it’s just someone else they want to get involved, such as a strategic investor or someone international,” he said, adding that he did not have direct knowledge of this specific round.
Earlier this year Airbnb announced a strategic push in China, where it has partnered with China Broadband Capital and Sequoia China to help it tap into Chinese tourists travelling overseas.
Another focus for the company is boosting its supply of hosts, as it faces a surge in demand from travellers. The company recently announced variable pricing for its rooms, taking the playbook from the traditional hotel industry, as a step toward boosting revenues.
Airbnb’s new fundraising was earlier reported by The Wall Street Journal.
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