The pandemic has hit Airbnb hard, as has the entire travel and tourism industry. Bookings dried up overnight. In the meantime, the housing broker's business is slowly recovering – and the plans for an IPO are also becoming more concrete.
Housing broker Airbnb is pushing ahead with its IPO plans. Airbnb announced that the company had filed confidential documents for an IPO with the US Securities and Exchange Commission. That's a surprising turnaround for a company whose business has suffered badly from the coronavirus pandemic.
The number of shares and the price range for the planned issue have not yet been determined, said the San Francisco-based company. Airbnb tends to list its shares on the Nasdaq technology exchange, said people familiar with the matter. However, this is not yet certain, and the company can still opt for the New York Stock Exchange instead.
Airbnb announced at the end of last year that it wanted to go public – but plans were thwarted when the corona pandemic brought global travel to a standstill. The company originally planned to make its much-anticipated debut this year via a direct listing that would not have generated additional revenue, but is now planning to raise funds through a traditional IPO.
Airbnb is one of several companies now heading for IPO as the IPO market revived that had virtually stalled due to the coronavirus pandemic. The issue will nonetheless become a test case for the public markets, especially against the background of increased caution towards lossy startups. CEO Brian Chesky is under pressure from employees to go public this year as many of their valuable stock options are about to expire.
Business has recovered surprisingly quickly
Founded in 2008 after the co-founders began renting out an air mattress to guests in their downtown San Francisco apartment, Airbnb has grown to become one of the highest-rated startups in the past decade. In a private round of funding, Airbnb was valued at more than $ 30 billion in 2017 and had revenues of $ 4.8 billion last year, according to the Wall Street Journal-audited financial statements. But the administrative costs have also risen rapidly in recent years, as the company spent a lot of money on a trendy company headquarters and tried to take action against crime and ensure security. This resulted in the company posting a net loss for the first nine months of 2019 while still making a profit in the same period last year.
Then came the pandemic that year. Bookings dried up overnight, and the company fell into the crosshairs of disgruntled hosts who also watched their earnings evaporate as the company reimbursed guests.
However, since the spring, Airbnb has recovered surprisingly quickly, even if people are no longer traveling that far away, they continue to search for their rental apartments and rooms on the Airbnb platform. While bookings are still declining year over year globally, in the US they rose 22 percent and 6.7 percent year over year in June and July, respectively, reports AirDNA, an analytics firm that monitors the short-term rental market.
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