Airbnb IPO Announcement:
Home-sharing rental start-up Airbnb has announced its plan to get publicly listed in the year 2020. It is yet to unveil whether the company has filed its S-1 Initial Public Offering paperwork, via which potential investors would have access to basic financial information for consideration. If listed, the IPO of the start-up is expected to be among the most high-profile players in the year.
Let us have a look at the business of Airbnb, in addition to products and services offered.
About the Company:
Airbnb was founded in the month of August 2008 by CEO of the company Brian Chesky with his two former roommates in San Francisco (present headquarters, 888 Brannan Street in San Francisco, California). Its subsidiaries include Crowdtilt, Luxury Retreats International Inc., Aibiying, Accomable, Deco Software Inc., Trooly, Inc., S.L., Lapka, Inc., Trip4real Experiences, HotelTonight and Airbnb UK Limited.
The company obtained its first seed investment of $600,000 in 2009, after which it managed to get on board venture capital investments from industry heavyweights. In the year 2011, in its another funding round (third), Airbnb raised close to $112 mn from investors such as Crunchfund, General Catalyst and venture capital group of Jeff Bezos. In the year 2015, the company raised another $1.6 bn in venture capital, followed by a $1 bn capital raising in the year 2017.
In 2018, the company announced ‘Backyard’ (slated to test prototypes by late 2019), an initiative to explore building new homes to accommodate short-term rentals. Presently, the company has a staff of more than 12,736 employees all around the globe.
Hosts are offered with a robust platform to provide guests with tourism-related activities and short-term lodging. Lodging related services can be accessed by using filters such as price, location, lodging type and dates. Other specific types of information such as vacation homes, unique homes and bed and breakfasts can also be obtained via the platform.
In the booking process, users need to provide their personal details and payment information, and for some specific hosts, users require a scan of government-issued identification before accepting a reservation. Users through a secure messaging system, even have the provision to chat with hosts. The price details for the rentals such as guests, home type, rules, and amenities, are determined by the hosts, with recommendations from Airbnb. Both the users and hosts have the provision to write reviews for their experiences.
Additionally, users have the provisions to book activities with local guides, which would include guided tours, meetups and cooking glasses.
Under Airbnb Collections, the company provides families the provision to book homes or properties for dinner parties, weddings, and gatherings for specific occasions.
Under Airbnb Plus, the company marks the hosts with a badge to differentiate them from the standard listings, which provide a verified level of conditions including a full cooking equipment, clean refrigerator, fast Wi-Fi, stocked toiletries and strong water pressure.
Under Niido, the company provides a brand of apartment communities (featuring “master host” that oversees guest check-ins and cleaning services) designed for tenants to rent out their units for a maximum of one hundred and eighty days every year on Airbnb. Under this service, profits are shared with the landlord. Moreover, hosts can get on-site help for submitting permit applications, creating their profiles and paying local occupancy taxes.
Under Natiivo, the company provides a brand of condo hotels, aimed at promoting home-sharing. Natiivo buildings carry hotel licenses, featuring amenities like vatel parking, 24-hour concierge, co-working spaces and other important amenities.
In its journey, Airbnb also faced criticism. Such as in 2016, the company received many complaints related to racism. Moreover, a study by Harvard Business School had found discrimination by hosts against their guests, suggesting that black people were less likely to get accommodations. Following such complaints, former Attorney General Eric Hodler was hired by the company to help roll out an anti-discrimination policy.
Moreover, in 2018, the company announced removal of around 200 listings in Israeli settlements in the occupied West Bank, due to dispute between Israelis and Palestinians; however, the listings in the Israeli settlements in East Jerusalem or the Golan Heights were not affected. This move was criticised by the Israeli Tourism Minister and the Simon Wiesenthal Center, calling it antisemitism, whereas the move was praised by the Boycott, Divestment and Sanctions movement, Palestinians, Amnesty International and Human Rights Watch.
As Airbnb unveiled its plans for IPO, market experts are anticipating a better luck for Airbnb, which was valued at around $31 bn two years back and registered revenue of around $1 bn in the second quarter of the year.
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