8 ms·

Airbnb Is Said to Be Seeking Funding Valuing It at $30B

35 points by coloneltcb 10y ago

bogomipz 10y ago
It seems like a lot of the gunicorns are topping up their funding lately - Uber, Airbnb, Spotify.
grillvogel 10y ago
a friend of mine who recently interviewed at airbnb said that the employees have a personal barista that they can sign up to take lessons from, so at least you know that money is getting put to good use
- jbigelow76 10y ago
  If that next round doesn't come in those barista skills might come in handy.
  - frank_jaeger 10y ago
    Having a large portion of your staff barista-trained also allows for some pretty big pivots. These guys have their eyes on the longterm.
    - imperialdrive 10y ago
      ok, now I lol'd twice haha!
    - coldtea 10y ago
      Starbucks won't even know what hit them!
- orky56 10y ago
  As long as these types of perks continue to get shared in conversation and affect where an employee chooses to work, they will continue to be offered and will grow even more extreme in terms of catering to the needs of employees.
- kchoudhu 10y ago
  I don't want a barista to teach me to make coffee -- I want a barista to make me coffee.
- smilingtom 10y ago
  yikes, the shameless stupidity of this comment is very worrying to me
chollida1 10y ago
> A $30 billion valuation would make Airbnb the second-highest-valued start-up in the United States behind Uber, which is now valued at $62.5 billion, according to a list compiled by CB Insights. Is there an age limit to being called a startup? Is there a valuation limit? Revenue limit? I guess the line used to be when a company went public, but that's not really cool anymore. Maybe the new definition of a unicorn should be a private company that is profitable and requires no outside funding?
- sytse 10y ago
  As long as you're growing fast you are a startup http://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html Size is irrelevant, you can be a small restaurant and not be a startup if you're not growing fast anymore.
  - untog 10y ago
    So when Apple launched the iPhone they were a startup?
    - adventured 10y ago
      The premise obviously doesn't make sense. Start-up means getting started, starting up something, early into the formation, a young entity, etc. To claim a massive 40 year old business - with many old products - can be a start-up, would be to intentionally obfuscate the historical use of the term. There's no good reason to declare that Apple was a start-up when it was growing fast, it makes no sense. What would be the purpose of contorting the language for that? It's a: "fast growing company," that's all the description that's necessary for any older business that grows quickly.
      - untog 10y ago
        Well that's my point. That the term "startup" is already hopelessly corrupted, and by the OPs standard Apple would count. It makes no sense, and is largely the way it is for PR reasons.
blakecallens 10y ago
https://media.giphy.com/media/74Ub8Zkxi9eDu/giphy.gif https://media.giphy.com/media/74Ub8Zkxi9eDu/giphy.gif
iandanforth 10y ago
I have personally swapped AirBnB for the entire hospitality industry in my mind. The only times I end up in hotels now are when I'm booked into one by my employer. I wouldn't, for pleasure, stay in a hotel or motel unless I really had no other choice. I was very happy to discover that AirBnB has a significant presence in Japan which made my recent trip there more pleasant and saved me money.
- dbot 10y ago
  Hmmm...are you mostly using the private room or entire home/apt? I've found that if you are looking for just a private room, you can get a deal. But then you are also in a stranger's house, which as a 30-something I'm not always that comfortable with. When I travel with my wife, it's not even an option. When I look at entire home/apt listings, the prices are often very comparable to nearby hotels, and often I can get a cheaper hotel using an "opaque" service like Hotwire or Priceline. As between the two, I'd much rather stay in a hotel, since they are set up for travelers and I can get whatever extra towels, amenities, etc. that might be missing from an AirBnb.
  - aianus 10y ago
    But even at the same price, having an entire home in a residential area is much nicer than a small hotel room in the most touristy part of town.
  - iandanforth 10y ago
    I do entire home/apt. Perhaps I've never made enough use of hotel amenities, but so far I haven't missed them in an AirBnB.
- untog 10y ago
  I used to think that, but I've since gone back to mostly staying at hotels. AirBnBs are absolutely more unique than hotel rooms, but that isn't always a good thing. I've had too many late nights sat outside a property waiting for the owner to turn up, too many broken fixtures (including heating) with no-one to repair. And (as the other poster mentioned) I've been very surprised to find out that these days AirBnB rates for "whole property" aren't even competitive with hotel rooms, especially when you factor in the "cleaning fee" and other such spurious fees that seem designed to make it difficult for you to calculate a total easily.
JNaz 10y ago
Marriot Intl: 200k employees, 13b revenue, 4000 hotels, 15b market cap Hilton Worldwide, 160k employees, 11.3b revenue, 4660 properties, 21b market cap Hyatt, 97k employees, 4.4b revenue, ~600 properties, 5b market cap
- lettergram 10y ago
  Airbnb takes a percentage of every stay, don't need inventory(I.e. open rooms), nor more than a few hundred employee's. My guess is they have their valuation about right, assuming they continue to grow for the next 3 or 4 years
  - kirykl 10y ago
    That they don't need inventory or more than a few hundred employees makes me wonder what their real value is. Is the brand alone worth $30B ? You could have the same office staff running airBnb and uber. edit: I'm also thinking of the non existent switching costs for customers. I guess it works for credit card companies
    - foota 10y ago
      They have a significant investment in software and technological infrastructure to go with their investment in user acquisition.
    - lettergram 10y ago
      Uber is far more complex than airbnb. Airbnb makes money today (I assume), uber has an issue where they are in a highly competitive space, where technology matters (GPS, matching, etc.), And can't really even be profitable yet.
      - fjrjdndnd 10y ago
        Either User's business model works or it doesn't. Either they're profitable or they're not. It doesn't matter if they're in a competitive space. Businesses are supposed to make a profit, and anything else is just a wall of bad excuses to protect their valuation.
CPLX 10y ago
I mean I know the stock answers and so on already, but seeing these kind of articles makes me wonder why the hell companies that are so mature, and theoretically at least should be spinning off tons of operating cash, feel the need to raise these really astronomical sums of money. It's hard to see why the savviest long term strategy isn't just to keep booking billions of dollars worth of lodging bookings, keep their cut, and use it to grow the company. The last time I saw financing in the tech industry seem so out of step with basic economics was 2001. Not for startups in general necessarily, but for these super-giants like Airbnb and Uber something seems really wrong. When exactly do they have to start acting like normal boring businesses that are supposed to be good at something, and then make their money doing that thing?
- aerovistae 10y ago
  No kidding! I don't get this mentality that's sprung up in the last however many years to just keep taking funding. What's the point?? Imagine if Apple announced today it was "taking on funding to raise its valuation to $800 billion." What a thought!
- wfoweoi 10y ago
  Getting investors who can help with regulation challenges in certain cities seems worthwhile.
- adventured 10y ago
  Because they can raise a large amount of money at a modest dilution, it's really that simple. It's a way of guaranteeing their seat at the table, whether that's in regards to hiring or acquisitions or otherwise. When you're going up against huge companies like Priceline.com ($60b market cap, $3.3b cash, $9b sales, $2.5b profit) and Expedia ($15b market cap, $2.1b cash, $6.6b sales) - the more cash the better. Further, who knows if these relatively easy capital raising days will last (for Airbnb types at least), or whether we're rolling into a recession. Oh yeah, and because they wouldn't be worth $30 billion if they were publicly traded. They're raising money far beyond what their business is going to be worth at any point in the next five years based on comparables to either Priceline or Expedia.
lettergram 10y ago
Every person I know, young to old use airbnb now. I can't say the same for uber. Plus, as mentioned in a comment, although it would be have a higher market cap than Hilton, Hyatt, etc. They also have no inventory, employees, property tax, and so on. I see this valuation being low in a few years. Instead, of thinking of them as a hotel chain (or something similar), we should think of then as an insurance and travel company
- deleted 10y ago
  [deleted]
- mylons 10y ago
  I have the opposite anecdotal experience. Most people I talk with in the midwest do not use airbnb, they use vrbo.
  - lettergram 10y ago
    Weird everyone in the Midwest (where I'm from) has only ever mentioned uber.
- codingdave 10y ago
  For personal travel, I tend to hear the same. But for professional travel, the people I know still seem to be fairly traditional. It is not a good risk/reward balance to allow the possibility of a business trip being disrupted because of a bad host, or a surprise cancellation.
pyrophane 10y ago
I wonder if these terms account for the potential impact on Airbnb's growth that all of the new regulations being proposed in places like NY and Europe could have. A lot of effort is being put forth to curtail full-time entire apartment listings in several of the company's largest markets, and there is good reason to believe that those listings contribute significantly to their revenue. For example, a study put forth by housing advocacy groups recently identified over 8,000 "impact listings" in NYC alone, which are essentially entire apartments being operated on a close to full-time basis. [1]. Certainly these groups are biased, but their methodology for finding full-time listings looks sound. I'll do a little quick math to consider the revenue and fees Airbnb may be collecting from those: 200 days a year rented (total guess on my part) * $120 (somewhat less than the average shown for a one night stay) * 8000 (full-time listings) = $192M total revenue Or maybe around $19M in total fees collected from both hosts and guests. Granted, I could be way off here, but I think it shows how much money is potentially at stake in these listings that, if the current legislation on Cuomo's desk passes, could go away nearly overnight. My point is that these new regulations appear to represent a substantial risk to Airbnb's continued growth. It makes me wonder how much this new raise might be earmarked for fighting cities on regulations and conducting an aggressive PR campaign to sway public opinion in their favor. 1. http://www.sharebetter.org/story/housing-report-short-changing-new-york-city/ http://www.sharebetter.org/story/housing-report-short-changi...
- deleted 10y ago
  [deleted]
- mylons 10y ago
  and also to fund their legal proceedings against the city of San Francisco. I really do not like that they're suing the city because a consequence of them winning seems to be more stifling of housing in the city available for those who live in the bay. http://www.nytimes.com/2016/06/29/technology/airbnb-sues-san-francisco-over-a-law-it-had-helped-pass.html http://www.nytimes.com/2016/06/29/technology/airbnb-sues-san...
mattmanser 10y ago
Every person I know, young to old use airbnb now Not really much of a surprise as you're a young, white male working and living in the SF bubble.
- dang 10y ago
  That's unduly personal and not ok. We detached this comment from https://news.ycombinator.com/item?id=11997359 https://news.ycombinator.com/item?id=11997359 and marked it off-topic.

35 points by coloneltcb 10y ago

It seems like a lot of the gunicorns are topping up their funding lately - Uber, Airbnb, Spotify.

a friend of mine who recently interviewed at airbnb said that the employees have a personal barista that they can sign up to take lessons from, so at least you know that money is getting put to good use

jbigelow76 10y ago
If that next round doesn't come in those barista skills might come in handy.
- frank_jaeger 10y ago
  Having a large portion of your staff barista-trained also allows for some pretty big pivots. These guys have their eyes on the longterm.
  - imperialdrive 10y ago
    ok, now I lol'd twice haha!
  - coldtea 10y ago
    Starbucks won't even know what hit them!
orky56 10y ago
As long as these types of perks continue to get shared in conversation and affect where an employee chooses to work, they will continue to be offered and will grow even more extreme in terms of catering to the needs of employees.
kchoudhu 10y ago
I don't want a barista to teach me to make coffee -- I want a barista to make me coffee.
smilingtom 10y ago
yikes, the shameless stupidity of this comment is very worrying to me

chollida1 10y ago

> A $30 billion valuation would make Airbnb the second-highest-valued start-up in the United States behind Uber, which is now valued at $62.5 billion, according to a list compiled by CB Insights. Is there an age limit to being called a startup? Is there a valuation limit? Revenue limit? I guess the line used to be when a company went public, but that's not really cool anymore. Maybe the new definition of a unicorn should be a private company that is profitable and requires no outside funding?

sytse 10y ago
As long as you're growing fast you are a startup http://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html Size is irrelevant, you can be a small restaurant and not be a startup if you're not growing fast anymore.
- untog 10y ago
  So when Apple launched the iPhone they were a startup?
  - adventured 10y ago
    The premise obviously doesn't make sense. Start-up means getting started, starting up something, early into the formation, a young entity, etc. To claim a massive 40 year old business - with many old products - can be a start-up, would be to intentionally obfuscate the historical use of the term. There's no good reason to declare that Apple was a start-up when it was growing fast, it makes no sense. What would be the purpose of contorting the language for that? It's a: "fast growing company," that's all the description that's necessary for any older business that grows quickly.
    - untog 10y ago
      Well that's my point. That the term "startup" is already hopelessly corrupted, and by the OPs standard Apple would count. It makes no sense, and is largely the way it is for PR reasons.

blakecallens 10y ago

https://media.giphy.com/media/74Ub8Zkxi9eDu/giphy.gif https://media.giphy.com/media/74Ub8Zkxi9eDu/giphy.gif

iandanforth 10y ago

I have personally swapped AirBnB for the entire hospitality industry in my mind. The only times I end up in hotels now are when I'm booked into one by my employer. I wouldn't, for pleasure, stay in a hotel or motel unless I really had no other choice. I was very happy to discover that AirBnB has a significant presence in Japan which made my recent trip there more pleasant and saved me money.

dbot 10y ago
Hmmm...are you mostly using the private room or entire home/apt? I've found that if you are looking for just a private room, you can get a deal. But then you are also in a stranger's house, which as a 30-something I'm not always that comfortable with. When I travel with my wife, it's not even an option. When I look at entire home/apt listings, the prices are often very comparable to nearby hotels, and often I can get a cheaper hotel using an "opaque" service like Hotwire or Priceline. As between the two, I'd much rather stay in a hotel, since they are set up for travelers and I can get whatever extra towels, amenities, etc. that might be missing from an AirBnb.
- aianus 10y ago
  But even at the same price, having an entire home in a residential area is much nicer than a small hotel room in the most touristy part of town.
- iandanforth 10y ago
  I do entire home/apt. Perhaps I've never made enough use of hotel amenities, but so far I haven't missed them in an AirBnB.
untog 10y ago
I used to think that, but I've since gone back to mostly staying at hotels. AirBnBs are absolutely more unique than hotel rooms, but that isn't always a good thing. I've had too many late nights sat outside a property waiting for the owner to turn up, too many broken fixtures (including heating) with no-one to repair. And (as the other poster mentioned) I've been very surprised to find out that these days AirBnB rates for "whole property" aren't even competitive with hotel rooms, especially when you factor in the "cleaning fee" and other such spurious fees that seem designed to make it difficult for you to calculate a total easily.

JNaz 10y ago

Marriot Intl: 200k employees, 13b revenue, 4000 hotels, 15b market cap Hilton Worldwide, 160k employees, 11.3b revenue, 4660 properties, 21b market cap Hyatt, 97k employees, 4.4b revenue, ~600 properties, 5b market cap

lettergram 10y ago
Airbnb takes a percentage of every stay, don't need inventory(I.e. open rooms), nor more than a few hundred employee's. My guess is they have their valuation about right, assuming they continue to grow for the next 3 or 4 years
- kirykl 10y ago
  That they don't need inventory or more than a few hundred employees makes me wonder what their real value is. Is the brand alone worth $30B ? You could have the same office staff running airBnb and uber. edit: I'm also thinking of the non existent switching costs for customers. I guess it works for credit card companies
  - foota 10y ago
    They have a significant investment in software and technological infrastructure to go with their investment in user acquisition.
  - lettergram 10y ago
    Uber is far more complex than airbnb. Airbnb makes money today (I assume), uber has an issue where they are in a highly competitive space, where technology matters (GPS, matching, etc.), And can't really even be profitable yet.
    - fjrjdndnd 10y ago
      Either User's business model works or it doesn't. Either they're profitable or they're not. It doesn't matter if they're in a competitive space. Businesses are supposed to make a profit, and anything else is just a wall of bad excuses to protect their valuation.

CPLX 10y ago

I mean I know the stock answers and so on already, but seeing these kind of articles makes me wonder why the hell companies that are so mature, and theoretically at least should be spinning off tons of operating cash, feel the need to raise these really astronomical sums of money. It's hard to see why the savviest long term strategy isn't just to keep booking billions of dollars worth of lodging bookings, keep their cut, and use it to grow the company. The last time I saw financing in the tech industry seem so out of step with basic economics was 2001. Not for startups in general necessarily, but for these super-giants like Airbnb and Uber something seems really wrong. When exactly do they have to start acting like normal boring businesses that are supposed to be good at something, and then make their money doing that thing?

aerovistae 10y ago
No kidding! I don't get this mentality that's sprung up in the last however many years to just keep taking funding. What's the point?? Imagine if Apple announced today it was "taking on funding to raise its valuation to $800 billion." What a thought!
wfoweoi 10y ago
Getting investors who can help with regulation challenges in certain cities seems worthwhile.
adventured 10y ago
Because they can raise a large amount of money at a modest dilution, it's really that simple. It's a way of guaranteeing their seat at the table, whether that's in regards to hiring or acquisitions or otherwise. When you're going up against huge companies like Priceline.com ($60b market cap, $3.3b cash, $9b sales, $2.5b profit) and Expedia ($15b market cap, $2.1b cash, $6.6b sales) - the more cash the better. Further, who knows if these relatively easy capital raising days will last (for Airbnb types at least), or whether we're rolling into a recession. Oh yeah, and because they wouldn't be worth $30 billion if they were publicly traded. They're raising money far beyond what their business is going to be worth at any point in the next five years based on comparables to either Priceline or Expedia.

lettergram 10y ago

Every person I know, young to old use airbnb now. I can't say the same for uber. Plus, as mentioned in a comment, although it would be have a higher market cap than Hilton, Hyatt, etc. They also have no inventory, employees, property tax, and so on. I see this valuation being low in a few years. Instead, of thinking of them as a hotel chain (or something similar), we should think of then as an insurance and travel company

deleted 10y ago
[deleted]
mylons 10y ago
I have the opposite anecdotal experience. Most people I talk with in the midwest do not use airbnb, they use vrbo.
- lettergram 10y ago
  Weird everyone in the Midwest (where I'm from) has only ever mentioned uber.
codingdave 10y ago
For personal travel, I tend to hear the same. But for professional travel, the people I know still seem to be fairly traditional. It is not a good risk/reward balance to allow the possibility of a business trip being disrupted because of a bad host, or a surprise cancellation.

pyrophane 10y ago

I wonder if these terms account for the potential impact on Airbnb's growth that all of the new regulations being proposed in places like NY and Europe could have. A lot of effort is being put forth to curtail full-time entire apartment listings in several of the company's largest markets, and there is good reason to believe that those listings contribute significantly to their revenue. For example, a study put forth by housing advocacy groups recently identified over 8,000 "impact listings" in NYC alone, which are essentially entire apartments being operated on a close to full-time basis. [1]. Certainly these groups are biased, but their methodology for finding full-time listings looks sound. I'll do a little quick math to consider the revenue and fees Airbnb may be collecting from those: 200 days a year rented (total guess on my part) * $120 (somewhat less than the average shown for a one night stay) * 8000 (full-time listings) = $192M total revenue Or maybe around $19M in total fees collected from both hosts and guests. Granted, I could be way off here, but I think it shows how much money is potentially at stake in these listings that, if the current legislation on Cuomo's desk passes, could go away nearly overnight. My point is that these new regulations appear to represent a substantial risk to Airbnb's continued growth. It makes me wonder how much this new raise might be earmarked for fighting cities on regulations and conducting an aggressive PR campaign to sway public opinion in their favor. 1. http://www.sharebetter.org/story/housing-report-short-changing-new-york-city/ http://www.sharebetter.org/story/housing-report-short-changi...

deleted 10y ago
[deleted]
mylons 10y ago
and also to fund their legal proceedings against the city of San Francisco. I really do not like that they're suing the city because a consequence of them winning seems to be more stifling of housing in the city available for those who live in the bay. http://www.nytimes.com/2016/06/29/technology/airbnb-sues-san-francisco-over-a-law-it-had-helped-pass.html http://www.nytimes.com/2016/06/29/technology/airbnb-sues-san...

mattmanser 10y ago

Every person I know, young to old use airbnb now Not really much of a surprise as you're a young, white male working and living in the SF bubble.

dang 10y ago
That's unduly personal and not ok. We detached this comment from https://news.ycombinator.com/item?id=11997359 https://news.ycombinator.com/item?id=11997359 and marked it off-topic.