Airbnb Is the Latest Tech Unicorn Eyeing an IPO

Airbnb IPO

This is not investment advice. The author has no position in any of the stocks mentioned. has a disclosure and ethics policy.

Airbnb – the company that offers a vast online marketplace for lodging and homestays – announced on Thursday via a statement that it is planning to go public “during 2020”. This news comes only days after WeWork – the company that provides shared workspaces – was forced to delay its own IPO as investors remained skeptical over its business viability and corporate governance violations.

Airbnb has recently claimed that it has over 7 million listings in over 100,000 cities providing services to 8.2 million guests during the current year up to July 2019. The company has in the past indicated its intention of pursuing a public listing. In March 2019, the co-founder of Airbnb Nathan Blecharczyk said, “We have already said that we are taking the steps to be ready to go public in 2019. That doesn’t mean we will go public in 2019.” The company has however not clarified whether it has confidentially filed the requisite S-1 IPO paperwork that would entail provision of pertinent financial information to potential investors in order to facilitate their sound judgement regarding company prospects.

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The company was founded in 2008 by the former bodybuilder and current CEO, Brian Chesky, along with two other roommates. The trio started the business by renting air mattresses in a room in San Francisco. The business gained momentum with a $600,000 seed investment in 2009. During its third funding round in 2011, Airbnb raised $112 Million from investors that included Jeff Bezos, the CEO of Amazon (NASDAQ:AMZN). Since then, the company has raised $4.4 Billion through Venture Capital (VC) investments with the latest funding round concluding in 2017 which valued the company at a whopping $31 Billion.

The tech unicorn has been involved in an expansion spree lately to widen the scope of its offerings. Recently, the company purchased HotelTonight app which assists users in finding eleventh-hour hotel room bookings at a discount. The app was valued at $463 Million in 2017. Thereafter, in June 2019, the company introduced the high-end ‘Luxe’ offerings which include over 2000 opulent rental listings and is intended to compete with a similar service currently being offered by Marriott. Airbnb also now allows guests to book local tours, cooking classes, and other culture immersion activities through its platform. However, the company has faced criticism in recent days in New York and Barcelona for causing over-tourism and leading to unsustainably high rents which have now begun to fall beyond the range of local residents.

Airbnb has recently announced that it earned “substantially more than” $1 Billion in the second quarter of this year. Consequently, the company’s IPO is expected to obtain a much more welcoming reception from investors as opposed to that accorded to Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT). Reuters has quoted the Renaissance Capital’s Kathleen Smith as saying, “I think it’ll be a whole different reception for Airbnb, assuming that they can show they’re a profitable business without having to lose money on marketing.”

2019 has been characterized as the year of unicorn IPOs. However, these listings have been somewhat of a mixed bag with Zoom (NASDAQ:ZM) and Pinterest (NYSE:PINS) flourishing post-IPO while Uber and Lyft floundering over their inability to generate sustainable profits amid increasing regulatory oversight (read our previous coverage here).

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