Airbnb valued at $33bn after raising $2bn in private placement

28 Jun 2015 | Author: | No comments yet »

Airbnb Raises $1.5 Billion in One of Largest Private Placements.

California-based Airbnb Inc, the online accommodations hub, plans to raise US$1.5 billion, sending its value up to US$25.5 billion, a source close to the deal said on Saturday. Home-rental service Airbnb has finalised one of the biggest private funding rounds ever, raising $US1.5 billion ($1.9bn), which will value the company at $US25.5bn ($33bn). A group of US and Chinese investment funds have been involved in the discussions, which are aimed at expanding Airbnb’s offerings in Asia, according to the source, who asked not to be named. Leading the round are private equity firm General Atlantic, Chinese firm Hillhouse Capital Group and alternative investment firm Tiger Global Management, which are collectively buying about a third of the shares allocated for this funding round, according to sources. The deal, advised by Morgan Stanley, includes Singapore’s Temasek Holdings as well as venture capital firms Kleiner Perkins Caufield & Byers, GGV Capital, China Broadband Capital and Horizon Ventures.

It would be among the biggest corporate capital infusions by a technology firm, among the likes of VTC Uber (US$2.8 billion), China’s online giant Alibaba Group Holding Ltd (阿里巴巴) (US$1.6 billion) and Facebook Inc (US$1.5 billion) before they went public. At US$25.5 billion, Airbnb, which does not own a single hotel, would be worth more than hotel giants Marriott International Inc (US$20.90 billion), Starwood Hotels & Resorts Worldwide Inc (US$14 billion) and Wyndham Worldwide Corp (US$10.01 billion). At $US25.5bn, Airbnb’s valuation would rank third on the list of venture capital backed start-ups valued at $US1bn or higher, behind Chinese smartphone maker Xiaomi and ride-sharing company Uber. Since it is not publicly traded, Airbnb does not have to publish its figures, but its sales have surged from US$250 million to US$850 million in just two years. The Wall Street Journal reported last week that Airbnb’s revenue is expected to exceed $US900 million this year, and then is projected to reach $US10bn in 2020.

Facebook Inc., FB 0.03 % meanwhile, raised $1.5 billion ahead of its IPO in 2011, including $1 billion worth of shares sold directly to individual wealthy non-U.S. investors. With Morgan Stanley’s involvement, the Airbnb deal is a landmark for banks’ push to advise on the giant private rounds that are helping companies put off IPOs. Morgan Stanley recently expanded its private-stock team, as have other banks, in anticipation that more companies will raise capital from many of the same institutions that buy into IPOs. A number of recent deals have used bankers, including Spotify AB’s $526 million offering via Goldman Sachs Group Inc., GS 0.16 % and Credit Karma Inc.’s $175 million round via Goldman and J.P.

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