Airbnb Inc.’s founders were moments away from merging their China business with local competitor Tujia in January 2017. Executives and investors spent hours hashing out a deal. Preliminary term sheets were drawn up. Then in the final hour of negotiations, Airbnb pulled out.
Investors had hoped a truce would stop the companies from hemorrhaging money in the fight for control of China’s blazing home-sharing industry. But rather than take a page from Uber, which agreed to cede China to rival Didi in exchange for an equity stake, Airbnb Chief Executive Officer Brian Chesky had a change of heart and decided to forge ahead in China alone.