Airbnb lowers internal valuation by 16% to $26bn
Exclusive: short-term rental site hit by sharp drop in bookings because of coronavirus outbreak
(Airbnb was last valued privately at $31bn after closing a reported $1bn funding round in September 2017)
The short-term rental site Airbnb, which has had its business hammered by the coronavirus fallout, has lowered its internal valuation to $26bn — a 16 per cent drop compared to its most recent funding round.
The new figure reflects the sharp drop-off in bookings as travellers have been forced to stay home, with estimates suggesting Airbnb bookings were down as much as 90 per cent in the most severely hit markets, according to data from AirDNA, an independent monitoring company.
Staff were told of the new valuation by chief executive Brian Chesky at a company-wide meeting on Thursday, a person familiar with the presentation told the Financial Times.
Airbnb was last valued privately at $31bn after closing a reported $1bn funding round in September 2017. Since then, however, secondary sales of indirect stakes in the company — where buyers gain rights to proceeds from a future initial public offering or sale — have suggested the company may have been worth more than $40bn at the end of 2019, as reported by the FT.
As it looks for more ways to raise capital, Airbnb has held conversations with new and existing investors to consider a late-stage funding round, a source familiar with those discussions said, though no firm decisions have been made.
The company recently met its bankers to request an extension to its $1bn credit line. The company has pulled back all its marketing campaigns in an attempt to save $800m.
Speaking to staff on Thursday, Mr Chesky noted other travel companies had been hit heavily since the impact of coronavirus. The market capitalisations of Expedia, Hilton and Booking.com are down 58, 44 and 37 per cent, respectively.
A person familiar with the Airbnb’s finances said internal projections predict a return to 2019-levels of revenue by next January. The company booked $4.8bn in revenue in 2019, a 35 per cent increase year-on-year, the person said.
However, according to a Wall Street Journal report, the company posted a loss for the first nine months of the year of $322m — costs Airbnb attributed to increased investments in safety and upgrading its systems. Before coronavirus hit, the source said, the company had anticipated that 2020 would see it at least break even, deducting for interest, tax and depreciation.
In an effort to prevent hosts from deserting the platform during the current uncertainty, Airbnb on Monday said it would spend $250m in reimbursing some of the money lost by hosts after they were forced to give full refunds to guests with travel plans disrupted by Covid-19. Airbnb also successfully lobbied for short-term rental hosts to be among the beneficiaries of the US government’s recent $2tn stimulus package.
The valuation drop casts yet more doubt on the company’s stated plan to make its IPO this year, though the company has not yet shared an updated timetable. The push to go public was motivated, in part, by expiring stock options held by staff.
fleet. The airline’s expenses are also not just salaries, marketing and rent - they also include operating leases, fuel, “parking” at airports, etc.
Would personally wait till the battery day and take out profits at this levels (not an investment advice). The stock turned into bitcoin. At least get out the initial investment.
I just listen to way too much Tesla stuff ahhh clearly I’m a fanboi