Airbnb Closes $1 Billion Funding Round With War Chest for GrowthBy
Valuation makes it second most-valuable startup after Uber
Cash could be used for further acquisitions, investments
Airbnb Inc. closed a funding round of more than $1 billion, valuing the home-sharing startup at about $31 billion, according to three people familiar with the company.
In December, Bloomberg first reported the company’s plans to increase the funding it was seeking by authorizing the sale of an additional $153 million in equity. Investors include Alphabet Inc. investment arm CapitalG and Technology Crossover Ventures.
Since its start in 2008, Airbnb has raised more than $3 billion and has plenty of cash on hand to pursue its goal of becoming a full-service global travel company. Last month Airbnb made its biggest acquisition yet, paying about $300 million in cash and stock for Luxury Retreats, a Canadian manager of high-end rentals. The company is also considering an expansion in the long-term rental business, people familiar with the matter have said. At the same time, the company is facing legal issues in many markets that see Airbnb as a threat to affordable housing.
Airbnb became profitable in the second half of 2016, and expects to continue to be profitable before interest, taxes, and amortization this year, people familiar with the matter have said.
Last year, Airbnb secured a $1 billion debt facility from banks including JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Morgan Stanley. The company also used some of its capital to buy back shares from Morgan Stanley.
A person close to the company said Airbnb has about $2 billion additional liquidity in float, which it collects when its guests reserve an accommodation. The company does not pay a host until after this guest completes their stay in a home.