Airbnb aiming to raise $3 billion in IPO by December
US: Airbnb is reportedly aiming to raise around $3 billion in its upcoming initial public offering [IPO], sources close to the matter told Reuters.
In news that may generate further optimism for the unicorn company, Airbnb is on course to achieve a valuation of more than $30 billion as a result of the IPO according to sources, significantly higher than its benchmark in April when its valuation dropped to $18 billion while raising $2 billion in debt from private equity firms such as Silver Lake and Sixth Street Partners.
The sources insisted, though, that this would be dependent on the market conditions over the coming weeks, especially with the US election scheduled to take place at the start of November and the threat of more travel restrictions as cases of Covid-19 accelerate.
It is believed Airbnb has set a provisional target of December to finalise the IPO, subject to change.
The global booking platform filed for its IPO back in August, around five months after it had initially intended to begin the filing process. This had to be delayed due to the outbreak of the coronavirus, which severely hampered the company’s worldwide operations, leading to widespread redundancies and spending cutbacks on its secondary service offerings.
CEO Brian Chesky admitted Airbnb had lost 80 per cent of its business in six weeks as the company began “haemorrhaging cash” at the start of the pandemic.
That said, Airbnb will have been encouraged by an unexpectedly sharp improvement in bookings in the latter summer months, when it announced in July that users had booked over one million nights in one day for the first time since 3 March.
Equally, 2020 has already proved to be something of a blockbuster year for IPOs, as record label Warner Music Group [$1.93 billion], data analytics company Palantir Technologies [direct listing, no money raised] and data storage firm Snowflake [valued at $70.4 billion, the largest ever for a software maker] have already showed.
Airbnb, along with on-demand delivery provider DoorDash, e-commerce site Wish, real estate marketplace OpenDoor and collaboration software provider Asana, will be keen to close their IPOs before any market volatility occurs in the wake of the 3 November US election.
One month ago, it also emerged that Airbnb had turned down the offer of a merger with a blank-cheque / special purpose acquisition company [SPAC] owned by billionaire investor Bill Ackman as it preferred to go down the traditional initial public offering [IPO] route.
The route to the IPO is in stark contrast to back in February before the impact and true scale of the pandemic was felt.
At the time, Airbnb reported a loss of $322 million for the nine months leading up to September 2019, while the first indications that it would be forced to delay its public debut only came to light at the start of March. CNN’s business correspondent Chris Isidore also predicted that the coronavirus outbreak would have as seismic a shock for the travel industry as 9/11 did post-September 2001.