Airbnb Is Said to Be Seeking Funding Valuing It at $30B

No kidding! I don't get this mentality that's sprung up in the last however many years to just keep taking funding. What's the point??

Imagine if Apple announced today it was "taking on funding to raise its valuation to $800 billion." What a thought!

Because they can raise a large amount of money at a modest dilution, it's really that simple. It's a way of guaranteeing their seat at the table, whether that's in regards to hiring or acquisitions or otherwise. When you're going up against huge companies like Priceline.com ($60b market cap, $3.3b cash, $9b sales, $2.5b profit) and Expedia ($15b market cap, $2.1b cash, $6.6b sales) - the more cash the better. Further, who knows if these relatively easy capital raising days will last (for Airbnb types at least), or whether we're rolling into a recession.

Oh yeah, and because they wouldn't be worth $30 billion if they were publicly traded. They're raising money far beyond what their business is going to be worth at any point in the next five years based on comparables to either Priceline or Expedia.

If the goal of Airbnb's investors/BoD was to grow a viable business, this would be a reasonable question - but their job is to increase the value of their (and their LPs') existing investment as much as possible, usually within a fixed time window.

For employees in the tech sector, this misalignment of incentives is one of the ugliest lessons to learn.

The first advantage is that it dries up funding for any potential competitors.

The second is that businesses face a sudden jump in their need for capital as they shift focus to their global operations.

Getting investors who can help with regulation challenges in certain cities seems worthwhile.

> Is there an age limit to being called a startup? Is there a valuation limit? Revenue limit?

This has become a problem lately with companies remaining private longer. You could consider it a start-up because it still aims to grow unprofitably by relying on private capital

> Maybe the new definition of a unicorn should be a private company that is profitable and requires no outside funding?

You could call it a grown up unicorn

I completely agree. Having multiple office locations, billions of dollars in funding and lobbyists doesn't really fit with the perception of 'startup." But it makes for more sensational copy.

As long as you're growing fast you are a startup http://www.paulgraham.com/growth.html Size is irrelevant, you can be a small restaurant and not be a startup if you're not growing fast anymore.

Here's that CB Insights list for anyone interested.

https://www.cbinsights.com/research-unicorn-companies

In my mind, "startup" implies that there is still risk that the company will cease to be a going concern in the near to medium term. The transition from "startup" to "former startup" is more of a process than an event. The magnitude of exit for companies like Uber, Airbnb, Dropbox, etc. may still be in question, but the chance that any of them will fail, go bankrupt, firesale, etc. seems very remote at this point.

Private company is objective but requiring no outside funding is a function of not only the current financial situation of the firm but also its intended growth trajectory and associated costs. As long as companies like Uber and Airbnb believe that it makes more sense to use funding to capture opportunities not possible through organic self-funded growth, we have no choice but to use terms like unicorn and startup.

Being profitable and requiring no outside funding is probably somewhat negatively-correlated with being a startup (because growth is often - though obviously not always - slower).

I've always just used "startup" to mean a private company that hasn't exited yet. You just have to qualify this futher. So Uber, Airbnb, Dropbox, Pinterest, etc. are all categorized as "large pre-IPO startups."

and also to fund their legal proceedings against the city of San Francisco. I really do not like that they're suing the city because a consequence of them winning seems to be more stifling of housing in the city available for those who live in the bay.

http://www.nytimes.com/2016/06/29/technology/airbnb-sues-san...

Airbnb takes a percentage of every stay, don't need inventory(I.e. open rooms), nor more than a few hundred employee's.

My guess is they have their valuation about right, assuming they continue to grow for the next 3 or 4 years

Not super familiar with this space, but is there a way to look at 'franchised' hotel brands vs. owner/operator brands? This would seem like a better comp. for Airbnb

Hmmm...are you mostly using the private room or entire home/apt?

I've found that if you are looking for just a private room, you can get a deal. But then you are also in a stranger's house, which as a 30-something I'm not always that comfortable with. When I travel with my wife, it's not even an option.

When I look at entire home/apt listings, the prices are often very comparable to nearby hotels, and often I can get a cheaper hotel using an "opaque" service like Hotwire or Priceline. As between the two, I'd much rather stay in a hotel, since they are set up for travelers and I can get whatever extra towels, amenities, etc. that might be missing from an AirBnb.

I used to think that, but I've since gone back to mostly staying at hotels.

AirBnBs are absolutely more unique than hotel rooms, but that isn't always a good thing. I've had too many late nights sat outside a property waiting for the owner to turn up, too many broken fixtures (including heating) with no-one to repair.

And (as the other poster mentioned) I've been very surprised to find out that these days AirBnB rates for "whole property" aren't even competitive with hotel rooms, especially when you factor in the "cleaning fee" and other such spurious fees that seem designed to make it difficult for you to calculate a total easily.

For personal travel, I tend to hear the same. But for professional travel, the people I know still seem to be fairly traditional. It is not a good risk/reward balance to allow the possibility of a business trip being disrupted because of a bad host, or a surprise cancellation.

I have the opposite anecdotal experience. Most people I talk with in the midwest do not use airbnb, they use vrbo.

If that next round doesn't come in those barista skills might come in handy.

As long as these types of perks continue to get shared in conversation and affect where an employee chooses to work, they will continue to be offered and will grow even more extreme in terms of catering to the needs of employees.

I don't want a barista to teach me to make coffee -- I want a barista to make me coffee.

yikes, the shameless stupidity of this comment is very worrying to me

That's unduly personal and not ok.

We detached this comment from https://news.ycombinator.com/item?id=11997359 and marked it off-topic.