Airbnb makes money by charging short-term rental hosts and guests for bookings made through the company’s service. Last quarter, it reported $219 million in net income on revenues of $1.34 billion.
How did Airbnb fare during the pandemic?
In the second quarter, Airbnb observed a massive loss in revenue which was down 72% year over year. Its losses increased to $575.6 million from $334.78 during the height of the pandemic, and the company responded by cutting costs, reducing marketing expenses, cutting bonuses, reducing executive salaries and laying off 25% of its workforce.
However, despite the slowdown that the pandemic created for the business, the company managed to bounce back a little with its customers returning for local getaways and for working remotely. It managed to report a third-quarter profit of $219.3 million, which was down from $266.7 million it made during the same period in 2019.
Airbnb IPO 2020 and the upcoming challenges for the company -The Airbnb IPO 2020 comes 13 years after the company got founded in 2007, and it will trade on the NASDAQ
exchange under the ticker symbol ABNB.
While the house-sharing platform boasts of 4 million hosts worldwide according to its prospectus, there are several upcoming challenges that the company may have to face. The biggest being the continued impact of coronavirus that is keeping people at home.
The fact that many hosts have opted to not list their accommodation on the Airbnb service is also a matter of great concern. Other than Covid-19, Airbnb has also struggled with safety issues in the past.
Future of the business –
Many experts feel that Airbnb’s business can fully recover and the recent reports provide evidence for the same. Even though the coronavirus led to severe losses, it also showed that the business model could rebound even with limited international travel.
The fact that people could take trips closer to home without having to travel much or go too far was a key advantage. Even now, with work-from-home getting advocated at a global level, Airbnb rentals are getting used by many. The business
model has accelerated the ability to live or work from anywhere.
Investment milestones –
The crucial investment milestones for the company as listed by Crunchbase are as follows –
20,000 USD in January 2009 by Y-Combinator
600,000 USD in April 2009 by Sequoia Capital
7.2 million USD in November 2010 by Greylock Partners
112 million USD in July 2011 by Andreessen Horowitz
200 million USD in October 2013 by Founders Fund
474 million USD in April 2014 by Andreessen Horowitz, Sequoia
1.5 billion. USD in June 2015 by General Atlantik, Hillhouse Capital Group, Tiger Global Management
100 million in November 2015 by FirstMark Capital
1 billion USD in June 2016 by JPMorgan Chase & Co
555 million USD in September 2016 by CapitalG and TCV
447.8 million USD in March 2017 by CapitalG andTCV
According to experts, the travel agency owned by Booking Holdings is a noteworthy competitor of Airbnb. Some others include HotelTonight, Urbandoor etc.