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Airbnb Inc.’s busy December- aiming for $35 billion valuation in upcoming IPO

The US-based rental online marketplace, Airbnb has recently mentioned in a statement that it is aiming for USD 35 billion valuation in its long-awaited Initial Public Offering (IPO).

IPO’s are a huge deal for businesses and this time around, specifically in December, it will be a very busy month for companies looking forward to their Initial Public Offerings.

Talking about Airbnb, the marketplace crashed badly during the COVID-19 induced lockdowns for the hospitality industry and home rental businesses. The company has been trying to recover from the losses for the past few months and finally awaits its IPO seeking to raise somewhere over $2.5 billion and concluding with an approximate $35 billion valuation.

Airbnb

Source: HBS Digital Initiative

According to regulatory filings, Airbnb Inc. has set a target price range between $44 and $50 per share, aiming to sell 51.9 million shares which would raise somewhere between $2.6 billion and $2.85 billion, depending on the price per share.

Airbnb was founded back in 2008 by current CEO- Brian Chesky, Nathan Blecharczyk and Joe Gebbia and according to sources; the founders are aiming to raise around $100 million by selling shares in their Initial Public Offering launch.

However, in the past few months, Airbnb suffered the same as any other hospitality company in the industry. The Covid-19 pandemic imposed unfortunate circumstances for the home-rental company to the point where it had to lay off 25% of its workforce and seek $2 billion from existing investors in emergency funding.

Existing investors include global investment firm, Sixth Street Partners and US-based global private equity firm, Silver Lake.

Turning to the bright side of things, lockdowns imposed because of Covid-19 have now been lifted, specifically talking about India and the United States. Hence, the recovery of Airbnb has initiated and the company is bouncing back to its pre-Covid-19 situation in terms of business.

One additional advantage that Airbnb has over other hospitality companies is that it is a home rental business and because of the spreading Corona Virus, people are going for safer options i.e. homes instead of hotels.

According to reports, CEO Chesky’s stake in the company would be valued approximately $3.8 billion after IPO concludes which is more that estimated $3.5 billion each from Blecharczyk and Joe Gebbia.

One of the company’s oldest investors, Sequoia Capital would have over $4 billion in stake, according to VCCircle.

Understanding the bumpy ride this year was for all of us, Airbnb is looking forward to one of its biggest and most anticipated Initial Public Offerings of 2020 aiming for a valuation of $35 billion.

 

 

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