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Airbnb Offers $50,000 Guarantee After User’s Home Is Trashed

Airbnb Inc., a website that lets users rent out their homes, announced plans to offer a $50,000 property protection guarantee after a host had her apartment vandalized by visitors.

The program, available starting Aug. 15, will be extended to all customers, including hosts who have reported past incidents, the San Francisco-based company said today in a blog posting. Airbnb also is adding a 24-hour customer hotline.

The announcement follows a June 29 report of vandalism on the blog of a woman known as EJ. She said that her San Francisco apartment was ransacked and personal property stolen by a renter who stayed at her place for a week. News of the incident spread last week, and the company faced criticism for its slow response to the case and the lack of protection offered to customers.

“We should have responded faster, communicated more sensitively and taken more decisive action to make sure she felt safe and secure,” Chief Executive Officer Brian Chesky wrote in the Airbnb post. “But we weren’t prepared for the crisis and we dropped the ball. Now we’re dealing with the consequences.”

Emily Joffrion, a spokeswoman for Airbnb, declined to say if an insurance company is involved with the guarantee program. The company will provide more details when the service debuts on Aug. 15, she said.

Funding Deal

The story of the ransacking circulated the same week Airbnb received a $112 million investment. Venture firm Andreessen Horowitz led the funding round, which included contributions from Russia’s Digital Sky Technologies and General Catalyst Partners. Bloomberg LP, the parent company of Bloomberg News, is an investor in Andreessen Horowitz.

The investment valued Airbnb at $1.3 billion, according to a person familiar with the matter. The startup competes with HomeAway Inc., an Austin, Texas-based company that held an initial public offering in June.

Founded in 2008 by Chesky, Joe Gebbia and Nathan Blecharczyk, Airbnb lets users rent out a couch, bedroom or full house. The company, which makes money by charging a fee for each transaction, lists properties in 17,030 cities in 190 countries, according to its website.

Airbnb has more than doubled its customer support team to 88 people since last month and is adding a 10-year veteran from EBay Inc. to run that team next week, Chesky said today. The company also has an in-house task force to review suspicious activity, he said.

Suspect Captured

In the EJ case, Airbnb worked with the San Francisco Police Department, and a suspect is now in custody, Chesky said.

In her original posting, EJ said that the renter rifled through everything in her home.

“They smashed a hole through a locked closet door, and found the passport, cash, credit card and grandmother’s jewelry I had hidden inside,” she said on the blog. “They took my camera, my iPod, an old laptop, and my external backup drive filled with photos, journals... my entire life.”

The technology blog TechCrunch, which covered the EJ incident last week, reported yesterday on another San Francisco Bay area resident, Troy Dayton, who suffered a similar experience two months ago.

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