Airbnb Latest Funding Round May Hit $20B

Airbnb is halfway to raising another billion dollars in funding, and bringing its total valuation to $20 billion, TechCrunch reported.

Word of the new round comes from sources that TechCrunch wouldn’t name, and details are scarce — some investors may be from Asia, and Fidelity Investments is an unconfirmed but rumored participant. Actual investors in recent rounds have included TPG Growth, T. Rowe Price and Dragoneer Investment Group, who were part of a $450 million Series D round in April 2014, and Founders Fund and Sequoia Capital as part of a $200 million Series C round in October 2013. The company also did a $50 million secondary round four months ago, bringing its valuation then to $13 billion.

A $1 billion round would more than double the company’s current official funding total of almost $800 million, according to SEC filings. It would also solidify Airbnb’s position as the travel startup with the second-highest valuation, behind Uber’s $40-billion-plus.

Like Uber, Airbnb is slowly working its way through legal challenges sparked by the hotels it’s disrupting, especially in some U.S. cities (including New York) where questions have been raised about whether all appropriate taxes are being paid and whether Airbnb-style short-term rentals are legal at all.

But that’s less the case in Europe. Amsterdam has passed legislation specifically permitting short-term rentals; the U.K. parliament is currently in the process of scrapping a London-only law that blocks home-sharing; and since France repealed a similar law in 2014, Paris has become the top city worldwide for both listings and users, according to the Guardian.

The service’s popularity has also created an unusual problem: Customer reviews on average are more positive than those posted on other sites, raising concerns that customers might think they’re too good to be real reviews.

Meanwhile, on Saturday (Feb. 28) Airbnb got an endorsement (but apparently not an investment) from Warren Buffett in his yearly letter to Berkshire Hathaway shareholders. Regarding his company’s annual meeting, Buffett suggests that Airbnb “may be especially helpful to shareholders who expect to spend only a single night in Omaha and are aware that last year a few hotels required guests to pay for a minimum of three nights. That gets expensive. Those people on a tight budget should check the Airbnb website.” (Note: Berkshire Hathaway is an investor in through its Business Wire subsidiary.)



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