Airbnb, the US-based online accommodation marketplace backed by internet technology group Alphabet, agreed $1bn in debt and equity securities from private equity firm Silver Lake and investment firm Sixth Street Partners yesterday.
Founded in 2008, Airbnb has built an online platform that enables users to book rooms or homes advertised by each other for short-term stays, in addition to curated local experiences. However, the global Covid-19 lockdown has caused its business to drop off dramatically.
The company internally confirmed last week that it had downgraded its valuation to $26bn, down from $31bn. It has allocated $5m of the capital to a $15m Superhost Relief Fund intended to mitigate economic effects of the lockdown on the hosts that rely on its platform.
Airbnb said it will also use the funding to invest in its hosts, without giving specifics, as well as expanding options for longer term stays for situations such as student housing or extended work travel.
Brian Chesky, co-founder and CEO of Airbnb, said: “The desire to explore, connect, have new experiences, and have a comfortable place to call home are universal and enduring. And our commitment to create a greater sense of belonging – for everyone, everywhere – will never change.”
The company was valued at $31bn in a series F round co-led by Alphabet’s growth equity arm, CapitalG, and growth equity firm TCV that closed at $1bn in 2017 to take its overall funding to $3.4bn.
Airbnb subsequently raised $202m from unnamed investors in May 2019 to cover its acquisition of hotel listings service Hotel Tonight, and $25.9m to support its purchase of furnished apartment provider UrbanDoor four months later, according to securities filings.
Investment and financial services group Fidelity had joined General Atlantic, Hillhouse Capital, Tiger Global Management, Temasek, Kleiner Perkins Caufield & Byers, GGV Capital, China Broadband Capital, Horizon Ventures, Wellington Management, Baillie Gifford and T. Rowe Price in a $1.5bn round for the company in 2015.
Other earlier investors in Airbnb include TPG, Tuesday Capital, Andreessen Horowitz, Dragoneer Investment Group, DST Global, Founders Fund, Firstmark Capital, Sequoia Capital, General Catalyst, Y Combinator and SV Angel.
