Airbnb fields “significant” investor interest

US: Sources close to Airbnb have revealed that the company is receiving “significant” interest in terms of pitches from investors, despite the outbreak of the coronavirus hitting the hospitality and travel industries hard.

According to American broadcaster CNBC, two sources privy to the matter said that Airbnb was in “listen mode” as it weighs up whether to raise money now or whether to ride out the worst effects of the virus first. Similarly, Reuters reported that discussions with venture capital investors and sovereign wealth funds were at a “very early stage and may not result in a transaction”, according to its anonymous sources.

In both cases, Airbnb declined to comment on the matter.

Airbnb’s interest in beginning the process of a public listing, perhaps even as early as this month, was already well documented although it is unclear whether this would be in the shape of a traditional initial public offering [IPO] or a direct listing.

CNBC has reported that Airbnb has up to $3 billion in funds and $1 billion in credit to utilise.

Early Airbnb investor Ron Conway told CNBC that he had been receiving calls of interest from potential investors.

He said: “Those investors are calling me saying, I hope Airbnb is raising right now because if they are, I want a seat at the table. A lot of them are ones that went through the dot-com crash with me back in 1999 and 2000.

“They’re the same people who were very wise and invested in companies like Google, Amazon and Apple. They’re saying, coming out of this downturn, it’s going to be companies like Airbnb that will be huge huge market performers.”

Conway added that Airbnb was more “nimble” to handle the impact of COVID-19 than other market competitors such as Booking.com and Expedia, and that it would be able to “weather the storm.”

He said: “I would highly expect that they would use some very good market technique to gain market share coming out of this. Their growth rate was already much higher than their competitors.

“Now, everyone in the travel industry is reeling but Airbnb, with that management team, will be much more nimble coming out of this trauma,” he added.

Shares in Booking Holdings and Marriott International have plummeted by 41 per cent and 56 per cent so far this year.

Now, at a turbulent time for fundraisers in the market, some experts believe investment rounds will stall this year and produce more low-key valuations in the face of the virus fears.

Though Airbnb CEO Brian Chesky has publicly admitted the company “does not need to raise money”, it may still pursue a direct listing instead of a traditional IPO as it would not have to sell new shares to public market investors. It has hired Morgan Stanley and Goldman Sachs as underwriters to lead its public listing, even though the company’s direction remains unclear.