Airbnb Could Be Joining the $10 Billion Valuation Club
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Airbnb has had some pretty bad publicity lately, but investors don't seem to be freaked.
The home rental startup is in talks to raise funding that would value the company at $10 billion, according to a Wall Street Journal report published today.
The round, which will likely be led by private-equity firm TPG, is estimated to raise between $400 and $500 million.
Not only would a $10 billion valuation put Airbnb at the top of a list of the most highly venture-backed companies (joining Dropbox and Chinese mobile-phone maker Xiaomi), it would also mean the San Francisco-based home sharing service is valued more highly than some of the hotel chains it competes against, including Hyatt Hotels at $8.4 billion.
Word of the new funding round comes on the heels of a recent crop of horror stories from Airbnb hosts. Last month, Rachel Bassini used the site to rent out her New York City penthouse; she returned to find the place epically trashed (the details are both grimy and well documented). And just this past weekend, Ari Teman gave his keys to a renter before promptly discovering that said renter was using his place to host an orgy (you can read Teman's full account of the ordeal in his blog post entitled "Dear AirBnB, No Thank You for the XXX Freak Fest").
Rental disaster stories like these two, along with continued pushback from regulators, has consistently plagued the company. Ultimately, both hosts were refunded for damages incurred but that didn't stop their horrifying accounts from spreading like wildfire.
It’s clearly not enough to scare away investors, however.
While Airbnb hasn't disclosed revenue or profitability, it currently has more than 600,000 listings in 160 countries. And according to the WSJ, Brian Chesky, the company's chief executive, has major plans for continued expansion; he has indicated that he would like to add more hospitality services, taking the platform beyond simply home and apartment rentals. Earlier this year, for example, Airbnb began testing a cleaning service for hosts in certain neighborhoods in San Francisco and New York.
"We are actively looking to build specific services," Mr. Chesky told the WSJ in January. "We need to offer more."