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Airbnb becomes latest tech 'unicorn' to plan US stock market listing

Credit: JOHN MACDOUGALL/AFP

Airbnb becomes latest tech 'unicorn' to plan US stock market listing
Airbnb says it made $1bn in the second quarter of 2019 renting homes and selling 'experiences'

Airbnb has set the ball rolling on a US listing that is expected to value it at more than $30bn (£24bn) as it becomes the latest Silicon Valley "unicorn" to hit Wall Street.

The home-sharing company said it planned to become a publicly-traded company next year, confirming speculation that it would join Uber, Slack and Pinterest in pursuing a float.

Airbnb is believe to have considered going public as early as this year but the disappointing performance of its fellow tech companies means it has now confirmed no listing will take place until 2020.

Shares in loss-making Uber, Lyft and Slack have all declined since their market debuts this year, and WeWork has delayed plans to go public. The office rental company was forced to push back its initial public offering, slated for next week, amid concerns that it has been overvalued and governance questions about its colourful founder, Adam Neumann.

"Airbnb Inc announced today that it expects to become a publicly-traded company during 2020," it said in a short announcement.

It is unclear whether it plans to raise funds by selling new shares, or pursue a "direct listing", an unconventional approach in which no new money is raised and shares float freely, which has become increasingly popular among tech firms.

Airbnb was valued at $31bn in its latest funding round in 2017. It said earlier this week that it made more than $1bn in revenue in the second quarter of 2019, the second time it has achieved the milestone. It has previously said it was profitable in both 2017 and 2018 in EBITDA, a measure of operating profits.

Airbnb said that between its launch and Sept 15, users who list their homes and rooms had made more than $80bn. It added that "more than six guests check into Airbnb every second".

Despite positive financial figures, the company faces significant regulatory challenges. As the company has grown to more than 7m listings across 100,000 cities, it has been met with obstacles from local government. Politicians are growing increasingly concerned about the "Airbnb effect" on house prices and availability.

Cities are proposing different regulations, with New York insisting that users register as landlords, San Francisco capping stays at 90 days and Paris 120.

Councillors in Bath have claimed that the city has been "ruined" by the company's popularity, with a number of Georgian properties being used for raucous "hen" and "stage" parties that disturb neighbourhoods.

London is mulling a registration system to help authorities regulate short-term lets and ensure rules are applied equally to all hosts, regardless of what website or app they list property on.

Founded by Brian Chesky, 38, in 2008, the company allows home-owners to rent out properties or rooms as an alternative to hotels.

However, it has branched out in recent years. In April, it poured $100m into Indian hotel chain Oyo and in March bought the hotel booking website HotelTonight for an estimated $463m. It has also moved beyond accommodation, selling access to "experiences" such as vineyard tours, kayak trips and comedy nights.

This may stave off investor concern that Airbnb will struggle to grow when challenged by incumbent hotel chains who are ramping up their technology and online sales tactics, like Marriott, along with online travel agents Booking.com, Expedia and Kayak.

It was followed by news from Stripe, founded by Irish brothers John and Patrick Collison, which announced that it is raising $250 million in additional funding. It is now valued at $35 billion. Stripe provides payment processing technology for Airbnb among others.

Topic: #airbnb
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