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May 31, 2011 11:37 pm
Airbnb, a fast-growing website that lets people rent out spare rooms and holiday homes online, is expanding “very aggressively” into Europe, its chief executive has told the FT, amid reports of a large funding round that could value the Silicon Valley start-up at $1bn.
Since launching in 2008, Airbnb has seen 1.8m nights of accommodation booked on its Ebay-style marketplace, to which about 1,000 properties are added for rent every day, largely by word-of-mouth recommendations.
With the acquisition of Accoleo, a small German clone of its service, for an undisclosed sum, Airbnb is establishing its first office outside the US. About 30 employees will be based in Hamburg by the end of June, in addition to about 100 in San Francisco.
“Airbnb is growing very quickly and we can see it starting to spread from major US cities out to the rest of the world,” said Brian Chesky, chief executive and co-founder. “I really feel we are the next great marketplace after Ebay.”
Its short-term private lettings service is the latest example of a “peer-to-peer” site that connects buyers and sellers online. 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.
Each service facilitates the transaction by giving buyers and sellers – or hosts and guests, as Airbnb puts it – a way to find each other, and provides a degree of security around the transaction.
Airbnb aims to boost confidence in a service that brings strangers into each other’s homes by displaying users’ reviews, like Ebay, and by holding payments in escrow, giving the host comfort that their renter has paid, but allowing the guest to get a refund if anything goes wrong.
In May, tech investors including Greycroft, PROfounders and Redpoint Ventures took a stake in 9flats, bringing the German site’s total funding to $10m, just six months after its creation.
Airbnb, which has raised $7.8m from venture firms Sequoia Capital and Greylock Partners, as well as from the actor Ashton Kutcher, is near to closing a round of more than $100m at a valuation of $1bn, according to TechCrunch.
Mr Chesky did not comment on the report but said investing in international growth was “extremely, extremely important for the future of Airbnb”.
With users in 180 countries, more than half of its revenue is from international travel. Bookings have grown at 16-40 per cent month on month for the past six months.
“It makes sense to have a local presence [because] Airbnb is an extremely intimate transaction – meeting in person, exchanging money and then living together,” he said. “This [German] acquisition is just one of the steps.”
Stephan Uhrenbacher, the serial entrepreneur behind Qype, a local reviews service, who founded 9flats last year, says peer-to-peer rentals could take 5 per cent of the hotel market.
“If you try it once, it makes a lot of sense,” Mr Uhrenbacher said. At an average price of €100-€150 for a three-bedroom flat, “you feel like you are in the city rather than an anonymous hotel room”.
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