Airbnb arrives at a lofty new figure to support a $1 billion funding effort
In an attempt to secure $1 billion in new funding, short-term rental behemoth Airbnb is making some rather bold claims to potential investors. The as-yet unprofitable startup says it will bring in $900 million in revenue this year, which would more than triple the figure Airbnb reported in 2013.
This financing round would value Airbnb at $24 billion, the Wall Street Journal reported Wednesday, citing anonymous sources. Which would put Airbnb above many big players in the hospitality industry, including Marriott (valued at $21 billion), which operates more than 4,000 hotels worldwide. Just over a year ago, Airbnb was looking at a valuation of $10 billion.
Airbnb is projecting it will turn a profit by 2020, by which time it expects revenue to grow to $10 billion. To meet these goals, Airbnb would have to increase its share of the global lodging market from 1 percent to as much as 10 percent over the next five years, Douglas Quinby, an analyst with research firm Phocuswright, told the Journal. Which is far from a guarantee, given how competitors like Priceline and Homaway continue to wade further into Airbnb’s turf, and possible regulatory restrictions loom in cities like New York and San Francisco.
Airbnb had some 1.4 million active listings at the end of May. Quite something for a startup whose founders once sold cereal to make ends meet.