Google Leads Airbnb’s Massive Funding Round

Alphabet’s investment arm has jumped on the Airbnb bandwagon, joining a round expected to net out at $850 million. That would put the homesharing platform’s valuation at around $30 billion, according to sources close to the deal quoted by The Wall Street Journal.

The round was also a chance for Airbnb employees who’ve been with the firm for more than four years to sell off some of their common shares to investors. Those shares are running at last year’s price — $93.09 — because common stock doesn’t have the same investor protections as preferred stock. Roughly $200 million of employee stock was sold as part of that fundraising, according to internal sources.

It remains open as to whether or not Airbnb will accept additional investment during this round.

With the closing of the deal, Airbnb is under somewhat less pressure to get itself up and running on the open market as it now has a fresh new infusion of funds to invest in expansion overseas and to keep its employees happy by giving them a chance to sell their “stock.” Airbnb had previously noted it does not intend to go public next year. One source’s explanation is that the firm has many regulatory challenges to surmount before it has an accurate picture of its long-term strategy.

The service, which exists in 34,000 cities worldwide, has faced opposition from hoteliers, local governments and neighborhood associations over taxes and safety regulations. It has also faced complaints that it is a major contributor to housing shortages and unaffordable rental pricing in desirable urban centers. It has also seen critiques that it makes it easy for users and hosts to discriminate.

At $30 billion, Airbnb is the fourth most valuable venture-backed tech company in the world, after ride-hailing services Uber Technologies Inc. and Didi Chuxing Technology Co. and Chinese handset maker Xiaomi Corp.

According to sources, Airbnb sought out new investors for this round and asked previous investors not to throw in. Demand was reportedly high, and Airbnb could be a bit choosy about which firms most closely aligned with its long-term goals. In reports that surfaced in June, Airbnb turned down a few mutual funds who were willing to invest at a valuation as high as $34 billion.

Airbnb’s newest strategic partner, Google Capital, was founded in 2013. The group is known for writing large checks in later-stage rounds, as opposed to Google Ventures, which focuses on smaller investments in earlier rounds.