With a loss of $697 million in 2020 and ‘no path to profitability’, Airbnb files to go public
We wrote about Airbnb back in May after the vacation rental marketplace cut 25% of its workforce in the latest round of coronavirus-related layoffs affecting the tech industry. “Today, I must confirm that we are reducing the size of the Airbnb workforce,” Co-founder and CEO Brian Chesky said in a memo sent to all Airbnb employees.
Fast forward six months later, Airbnb files to go public. In a prospectus released on Monday, Airbnb said it plans to trade under the symbol “ABNB” on the Nasdaq. The IPO announcement comes at a time when Airbnb is going through a difficult time and global travel is at a standstill. Just before the filings, Airbnb had raised $2 billion in new debt funding at a valuation of $18 billion and slashed costs across the company.
Because of its cut-cutting measures, the home-sharing platform was able to generate $219 million in net income on revenues of $1.34 billion last quarter. However, these figures may be deceptive. So far this year, the company has a net loss of nearly $697 million on revenues of $2.52 billion. The year before wasn’t any better. In 2019, Airbnb reported a net loss of $674 million on revenues of $4.81 billion.
“Our guests are not transactions — they are engaged, contributing members of our community,” the company said in its prospectus summary. “Once they become a part of Airbnb, guests actively participate in our community, return regularly to our platform to book again, and recommend Airbnb to others who then join themselves. This demand encourages new hosts to join, which in turn attracts even more guests. It is a virtuous cycle — guests attract hosts, and hosts attract guests.”
Founded in 2008 by Brian Chesky, Joe Gebbia, and Nathan Blecharczyk, Airbnb is an online community marketplace for people to list, discover, and book accommodations. Since its inception, Airbnb has raised a total of $6.4 billion in funding over 22 rounds. Their latest funding was raised on Jun 3, 2020, from a Secondary Market round. The company has been privately valued at $31 billion.