Airbnb investor relations material
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The #1 home renting platform
Airbnb Inc is an American technology company that operates a platform for individuals to rent out their homes and for users to book their stays.
Guests can book a variety of properties such as individual rooms, shared rooms, apartments, houses, hotels, and vacation homes. Airbnb builds on the principle that people with an extra home or room are willing to rent it out to people traveling to that area, as Airbnb doesn’t own any properties themselves.
The company was founded in 2008 and is headquartered in San Francisco, California.
The living room B&B
The Company was previously known and founded as AirBed & Breakfast. The name stems from the initial idea that the co-founders Brian Chesky, Joe Gebbia, and Nathan Blecharczyk had of putting air mattresses in their apartment to help visitors find somewhere to live for a relatively low cost and essentially creating a bed and breakfast. They built a website where travelers could book lodging and got their first customers in 2008.
To initially fund the business, CEO Brian Chesky had used credit cards, and at one point, he owed $25,000 in debt. The company later joined the famous startup incubator, Y Combinator, in 2009 and received $20,000 in funding.
The global asset-light hotel
Airbnb builds on the premise that individuals are willing to rent out their rooms, houses, apartments, etc. This means that Airbnb itself doesn’t own any properties and thus has a very asset-light business model. Instead, Airbnb’s revenue stems from taking a fee from bookings on the platform. Further, Airbnb has a business model that builds on network effects. An increase in supply (renters) means that it will attract more demand (guests) and vice-versa. This means that Airbnb doesn’t have to make any investments in properties to increase their revenues but rather attract more hosts and guests to the platform.
Airbnb went public on December 10, 2020, at an original price of $68 per share. The stock opened at $146, representing a gain of 115% and a market valuation of $100 billion.
Before the announcement of the IPO, Airbnb saw a major struggle in the challenges of the covid-19 pandemic due to bookings collapsing as a result of less travel and even saw a net loss. There were speculations if the IPO even would take place due to the current market climate and the company’s challenges with the pandemic. Eventually, they did follow through with the IPO in December 2020 and raised approximately $3.5 billion.