San Francisco-based Airbnb, the lettings marketplace that has changed the way the world books holidays and property letting got its IPO away yesterday (Thursday). Despite the difficulties of a pandemic year, the float was a triumph.
The Information (www.theinformation.com) commented that the company had also “achieved something rare in Silicon Valley: Its founding trio of executives has stayed with the firm from its inception through to today’s public market debut. The leadership stability brought by co-founders Brian Chesky, Nathan Blecharczyk and Joe Gebbia has been key to the company’s success, current and former employees say, blunting the impact of troubles—from fierce regulatory battles to substantial executive turnover to the crushing blow of the Covid-19 pandemic—that could otherwise have derailed the business.”
The listing valued the business at $47bn, considerably above earlier estimates – and almost three times the company’s $17bn value in its April fund-raising, in the first weeks of the pandemic. The company then reduced headcount by 25%.
Market reaction immediately either side of the IPO opening was strongly positive with shares sometimes trading at over double the launch price – valuing the company at an extraordinary $100bn.
Airbnb was founded in 2008 by three friends in search of extra income. By last year, the company was handling 1m stays per night. But, despite the rapid growth, the company is yet to make a profit. This year to Q3 the company booked $2.5bn in revenue but lost $700m. The regulatory environment is also tightening as countries seek to prevent environmental damage from “over tourism”.
The company’s influence has reached well beyond its original parameters, not only changing the way the world buys accommodation but exerting influence on interior design, urban architecture and government policy towards the balance between tourism and residential accommodation.
There is scope now for an enhanced content offer including features, travel guides and user generated content. Which is why we think Airbnb may increasingly become a digital media player.
It is four years since CEO Brian Chesky told a Cannes Lions audience that he wanted the platform to be seen as a media owner by creative agencies and brand marketers, similar to Facebook or Instagram, rather than simply an accommodation booking site. Just watch.
