US-based short-term accommodation marketplace Airbnb, which counts internet and technology conglomerate Alphabet as an investor, has reduced its internal valuation from $31bn to $26bn, the Financial Times reported on Friday.
Airbnb’s online platform enables users to rent our rooms or entire properties to each other for short-term stays and has also branched out into offering local activities and attractions, taking a slice of the payment each time.
The company has raised a total of $3.4bn having most recently received $1bn in series F funding in 2017 at the $31bn valuation. Alphabet subsidiary CapitalG co-led the round with growth equity firm TCV and Airbnb’s shares were selling at a $40bn valuation on secondary markets by the end of 2019, according to the FT.
The restrictions attached to the Covid-19 virus have however hugely affected Airbnb’s business, with short-term rental analytics provider AirDNA estimating its bookings will have fallen some 90% across its busiest markets.
Airbnb CEO Brian Chesky informed staff of the new valuation at a company-wide meeting on Thursday, a person familiar with the presentation told the FT.
CNBC reported late last month that the company had received “significant” interest from investors of late. It has applied for an extension to a $1bn credit line it had agreed with banks, and has considerably reduced marketing spend and frozen recruitment.
Airbnb’s investors also include investment and financial services group Fidelity, Horizon Ventures, Wellington Management, General Atlantic, Hillhouse Capital, Tiger Global Management, China Broadband Capital, Baillie Gifford, Temasek, Kleiner Perkins, GGV Capital, T. Rowe Price, DST Global, Founders Fund, TPG, Dragoneer Investment Group, Tuesday Capital, Andreessen Horowitz, Firstmark Capital, Sequoia Capital, General Catalyst, Y Combinator and SV Angel.
