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July 25, 2011 5:03 am
Airbnb, a three-year-old start-up that allows travellers to rent rooms in private homes all over the world, has raised $112m in new funding in a deal that values the company’s equity at $1.3bn, according to people familiar with the deal.
Venture capital firms Andreessen Horowitz, Digital Sky Technologies, and General Catalyst participated in the financing.
The San Francisco-based company said it would focus the resources on expanding into global markets, particularly Europe and Brazil.
As it seeks to expand in the European market, Airbnb faces local competition from German-based 9flats and Wimdu.
Since launching in 2008, more than 2m accommodation nights have been booked on the Airbnb peer-to-peer rental site, from a night in a residential flat to a week on a yacht.
The company interviews homeowners and displays reviews on its website to boost confidence among users. It also holds rental payments in escrow to comfort hosts.
Airbnb plans to use the new funds to fuel its rapid international expansion, opening new offices worldwide, making acquisitions and hiring employees familiar with local markets. In May the company acquired Accoleo, a small German company that offers a similar service.
“We need to be all over the world,” said Brian Chesky, Airbnb’s chief executive and co-founder. “We have users in almost every nation in the world,” he added. “To have a deep understanding of every country is not possible. You have to hire citizens of the world, people in all different markets.”
About 55 per cent of the company’s revenues came from international travel, Mr Chesky said.
The company said it wanted to position itself to meet growing demand in Germany, France, Brazil and particularly the UK so that it could take advantage of the 2012 Olympic Games in London.
The UK is among the company’s five highest-grossing countries. London is the second-most popular city in Europe with more than 70,000 guest nights booked and more than 1,500 listings in the city.
The short-term private lettings service is one of several new peer-to-peer sites that aim to connect buyers with sellers. Similar internet services include Seatwave and Viagogo for second-hand ticket sales, Zopa and Funding Circle for lending money, and Whipcar and GetAround for renting cars.
A number of technology start-ups are being flooded with funding and receiving sky-high valuations, causing many analysts to speculate about another internet bubble. However, Jeff Jordan of Andreessen Horowitz says Airbnb is a standout company.
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