Mar 20, 2020 - Economy & Business

Airbnb looks for backups to going public amid coronavirus downturn

Illustration: Aïda Amer/Axios

Airbnb may not be through with the private markets after all, as CNBC reports that the room rental giant is fielding offers from large investment firms, although pricing remains unclear.

Why it matters: 2020 was supposed to be the year that Airbnb went public, either through an IPO or a direct listing (or a combination of the two).

  • But there already was talk before the coronavirus crisis that the company was hedging a bit on timing, and right now there's no way any company — let alone a hospitality company — can successfully run a large float process (even via Zoom).
  • Airbnb last sold stock to VCs at a $31 billion valuation in late 2017. It later sold common stock at a $35 billion valuation, via its purchase of HotelTonight, and in early 2019 had an internal 409a valuation of $38 billion.

The state of play: For Airbnb, this would be protection money. The company does have plenty of cash on hand, and tells Axios that it has not yet laid off any employees, but its quarterly losses climbed in 2019 and its early 2020 results are bound to be abysmal as global travel has ground to a halt.

  • For investors, it's an opportunistic bet based on the belief that everything will be back to normal, or somewhat normal, at some point this year. If you believed a month ago that Airbnb would be a $50 billion public company by year-end, then it could make sense to buy in now in the $20 billion range — particularly as some of the company's hotel rivals may buckle under the weight of their fixed costs.

The bottom line: Dealmaking remains active, including for very well-known names. Just not the deals we were expecting to see.

Go deeper

Coronavirus hits Airbnb, already facing widening losses

Photo illustration: Axios Visuals

The coronavirus pandemic is already posing a drag on Airbnb bookings and revenue, according to new data from research firm AirDNA.

Why it matters: This can't be good news for Airbnb, which has been planning to go public in 2020, in part because some employee stock grants will expire by year's end.

Airbnb to spend $250 million to partially refund hosts

Photo Illustration: Thomas Trutschel/Photothek via Getty Images

After recently allowing all customers to cancel reservations due to the coronavirus pandemic, Airbnb says it will spend $250 million to refund 25% of the cancellation fees that hosts would have otherwise received depending on their select policy. It also created a $10 million relief fund for select hosts, which includes $9 million donated by Airbnb's founders.

The big picture: Airbnb has been in the unpleasant position of having to please both sides of its marketplace, while also managing its own finances. It recently cut marketing spend to save $800 million, among other moves, as its business takes a huge hit, a source tells Axios.

Go deeper: The gig economy's coronavirus test

Rural areas see short-term rental boom amid coronavirus spread

Illustration: Sarah Grillo/Axios

While the travel industry and accommodations are taking a major hit amid the coronavirus pandemic, short-term rentals in U.S. rural (and suburban, to a less extent) areas are seeing an uptick, according to new data from AirDNA.

The big picture: People are fleeing densely populated areas, especially on the coasts, and taking up shelter in isolated rentals in rural and more "destination" type of locales.