Airbnb IPO: Everything You Should Know
Credit: North Loop
Introduction –
Airbnb led by CEO and co-founder Brian Chesky, filed for its IPO in August this year. Even though its business got heavily impacted as a result of the pandemic-related slowdown in rentals, the recent documents filed with the SEC showed some recovery. In this article, we will talk about the Airbnb IPO date, Airbnb IPO share price and all other relevant information that you should know.
Airbnb IPO date –
Airbnb IPO took place on December 9, and the shares began trading today, on December 10. The company had initially announced its plan to go public in September, however, that did not work out.
Credit: North Loop
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Airbnb IPO share price –
Airbnb had previously said that it expected to sell shares at $56 to $60. However, it got sold at $68. The offering now values the company at $47 billion on a fully diluted basis. The initial price range would have led to the valuation at $42 billion.
More about Airbnb –
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
Competitors –
According to experts, the travel agency owned by Booking Holdings is a noteworthy competitor of Airbnb. Some others include HotelTonight, Urbandoor etc.
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
Competitors –
According to experts, the travel agency owned by Booking Holdings is a noteworthy competitor of Airbnb. Some others include HotelTonight, Urbandoor etc.
Conclusion –
Airbnb has a compelling growth story that started with offering ‘airbeds’ in a rented apartment several years ago. Today, the company has a strong tech advantage, runs countless tools and has a lot of automation to keep its massive system running. [para] It is also financially strong enough to give a tough fight to its competitors. Moreover, experts believe that investors value its versatility and might be keen on getting some shares of the company in their investment portfolio.
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