Airbnb’s business model Founded in 2008 by Joe Gebbia and Brian Chesky, the company is in the community based online platform space for listing and renting local homes. The company has come a long way and has become synonymous to the industry, having over 1.5 million listings in more than 200 countries. Airbnb works on the “sharing economy” business model which has become one of the most popular ways to do business. The model has in fact been adopted by giants like Uber, OYO Rooms, Lyft etc.
Financial Footing Since the beginning, Airbnb is struggling to make profits. Last year alone, the company lost $674 million as costs soared to a whopping $5.3 billion. In first nine months of 2020, the company reported net loss of $697 million, on revenues of $2.52 billion. Talking about the valuation, it was not much before when the company was valued between $50 billion and $70 billion (before the pandemic), the time when exorbitant valuations was a trend in the Silicon Valley.
* IPO Prospects In its latest IPO filing, the company cautioned that it expects a larger Y-o-Y booking decline in the current holiday quarter compared with what it posted in the three months ended in September. Being a juggernaut in the space and one of the early movers in the industry, all looked good in the pre-covid period. However, what could have been Airbnb’s year with its IPO, has probably become the nightmare amid dent on international travel and Airbnb’s bookings.