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Airbnb Said to Pursue Valuation Above $10 Billion in New Fund-Raising Round

dealbook.nytimes.com

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Re: Airbnb Said to Pursue Valuation Above $10 Billion in New Fund-Raising Round

#11

Post by grinich »

dsugarman wrote: post #3

why not IPO? I mean I think going public is terrifying and awful, but have to exit sometime right? if you raise at >$10B you would need to IPO at >$20B no?

https://en.wikipedia.org/wiki/Sarbanes–Oxley_Act

Being a publicly traded company sucks. I imagine a lot of this financing will go to cash out early investors, providing liquidity for those who need it, while still keeping the company private.

It's a common strategy with tech companies. (See Square, Uber, Dropbox, Twitter, etc.) The first major instance I remember was the $300MM DST/Yuri investment in Facebook in 2009.

Re: Airbnb Said to Pursue Valuation Above $10 Billion in New Fund-Raising Round

#12

Post by argumentum »

dsugarman wrote: post #3

why not IPO? I mean I think going public is terrifying and awful, but have to exit sometime right? if you raise at >$10B you would need to IPO at >$20B no?

Though there are drawbacks, I think there's a real good argument for AirBnB specifically to IPO. They would get a whole lot more stakeholders with skin in the game on their side. This will help in their ongoing public relations and regulatory battles.

Re: Airbnb Said to Pursue Valuation Above $10 Billion in New Fund-Raising Round

#13

Post by johnrob »

dsugarman wrote: post #3

why not IPO? I mean I think going public is terrifying and awful, but have to exit sometime right? if you raise at >$10B you would need to IPO at >$20B no?

I would think they need to sort out the lingering legal issues. You don't want to get into the area of "I raised money from public investors to run an illegal business". That's a jail time kind of offense. I'm not saying airbnb is illegal, but if the US courts turned on them I imagine it might get scary for the board and execs.

Re: Airbnb Said to Pursue Valuation Above $10 Billion in New Fund-Raising Round

#14

Post by hkphooey »

notlisted wrote: post #9

What a silly joke[1]. Though they are planning to launch additional services [2] @aaronapple below (above?) is right... regulatory changes are on the way. Right now they're violating the law, don't collect or pay local taxes unlike real hotels, don't bother with ensuring that local rules and regulations are followed. This will (and should) change soon. Hiding behind the people who rent out their spaces who are "suppo…

It's outrageous - no way is AirBnB "worth" more than Hyatt hotels!!!

"At $10bn, Airbnb would be one of the world’s most valuable startups and worth more than than Hyatt Hotels ($8.3bn) or Wyndham Worldwide ($9.4bn)."

http://www.theguardian.com/technology/2014/mar/20/airbnb-fun...

Re: Airbnb Said to Pursue Valuation Above $10 Billion in New Fund-Raising Round

#15

Post by notlisted »

jgalt212 wrote: post #10

Does anyone have a good estimate on what % of AirBnB rentals are illegal (i.e. not allowed by local zoning laws) and what % are just dodging local hotel taxes?

I suspect most AirBnB rentals are illegal in NYC.

Home owners who reside in the home are allowed to sublet a room, but not for less than 30 days (ie most are illegal).

If the owner does not reside in the home, it's also illegal and/or zoning laws come into play.

Most leases do not allow subletting of rental apartments without approval by the owner or they may face (and have faced) eviction (ie under 30 days, most are illegal as well).

By the way, it's not 'just' hotel taxes/fees. Income taxes as well.

In NYC, hotel taxes in NYC are about 15%, plus there are all kinds of rules an regulations that hotels need to adhere to (safety, maximum stay of 21 days, etc etc)

Edit: here are the official rules - http://ny.curbed.com/archives/2013/03/25/an_introduction_to_...

Re: Airbnb Said to Pursue Valuation Above $10 Billion in New Fund-Raising Round

#16

Post by dsugarman »

johnrob wrote: post #13
dsugarman wrote: post #3

why not IPO? I mean I think going public is terrifying and awful, but have to exit sometime right? if you raise at >$10B you would need to IPO at >$20B no?

I would think they need to sort out the lingering legal issues. You don't want to get into the area of "I raised money from public investors to run an illegal business". That's a jail time kind of offense. I'm not saying airbnb is illegal, but if the US courts turned on them I imagine it might get scary for the board and execs.

they provide enough value to enough people that they would never have something like that happen to them, there would be a public uproar.

if they were doing something wrong in the eyes of the public, that's another case

Re: Airbnb Said to Pursue Valuation Above $10 Billion in New Fund-Raising Round

#17

Post by forrestthewoods »

hkphooey wrote: post #14
notlisted wrote: post #9

What a silly joke[1]. Though they are planning to launch additional services [2] @aaronapple below (above?) is right... regulatory changes are on the way. Right now they're violating the law, don't collect or pay local taxes unlike real hotels, don't bother with ensuring that local rules and regulations are followed. This will (and should) change soon. Hiding behind the people who rent out their spaces who are "suppo…

It's outrageous - no way is AirBnB "worth" more than Hyatt hotels!!! "At $10bn, Airbnb would be one of the world’s most valuable startups and worth more than than Hyatt Hotels ($8.3bn) or Wyndham Worldwide ($9.4bn)." http://www.theguardian.com/technology/2014/mar/20/airbnb-fun...

Why is that crazy? How many guests does Hyatt serve per year? How many does AirBnB serve today? How many could AirBnB serve with continued growth for the next five years?

And of course the elephant in the room, how many will AirBnB serve if regulations are enforced? Also an open question of will AirBnB be commoditized and have its value spread across dozens, if not hundreds or thousands, of competitors across the globe?

Re: Airbnb Said to Pursue Valuation Above $10 Billion in New Fund-Raising Round

#19

Post by pdq »

forrestthewoods wrote: post #17
hkphooey wrote: post #14

Earlier quoted context omitted.

It's outrageous - no way is AirBnB "worth" more than Hyatt hotels!!! "At $10bn, Airbnb would be one of the world’s most valuable startups and worth more than than Hyatt Hotels ($8.3bn) or Wyndham Worldwide ($9.4bn)." http://www.theguardian.com/technology/2014/mar/20/airbnb-fun...

Why is that crazy? How many guests does Hyatt serve per year? How many does AirBnB serve today? How many could AirBnB serve with continued growth for the next five years? And of course the elephant in the room, how many will AirBnB serve if regulations are enforced? Also an open question of will AirBnB be commoditized and have its value spread across dozens, if not hundreds or thousands, of competitors across the glo…

HomeAway is public and worth $4 billion today. I'm pretty skeptical AirBNB is worth more than twice that.

Re: Airbnb Said to Pursue Valuation Above $10 Billion in New Fund-Raising Round

#20

Post by boomzilla »

dsugarman wrote: post #3

why not IPO? I mean I think going public is terrifying and awful, but have to exit sometime right? if you raise at >$10B you would need to IPO at >$20B no?

It's easier to get a high valuation in a private round as the terms could be very favorable to investors: like 3x pref liquidation, etc. You don't need to sell the company for more than the valuation for the investors to make money. In fact they could even make money even if the company is sold for much less than the round's valuation. The only ones who are screwed are employees with common shares.

Also, you can't short a private company, at least in the usual ways.

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