The Strategist

Airbnb raised one billion to launch new services

06/16/2016 - 15:20

Online rental service Airbnb attracted a loan of $ 1 billion to strengthen its business and to develop new services. Now, Airbnb is valued at more than $ 25 billion.

Open Grid Scheduler / Grid Engine via flickr
Open Grid Scheduler / Grid Engine via flickr
As reported by Bloomberg news agency citing sources familiar with the situation, the online property rental service Airbnb has attracted a loan of $ 1 billion to support its growth and develop new services. According to sources, the credit was received from banks JPMorgan Chase, Citigroup, Bank of America and Morgan Stanley. Last year, Airbnb’s price after the last round of investment, during which the service has attracted $ 1.5 billion, was estimated at $ 25.5 billion. 

Airbnb is going to go beyond the rental market. In March, it became known that the company was going to develop additional services for customers to book along with the real estate. Among these additional suggestions are food cooked for the customer by an individual chef, booking tables at restaurants, bike rental, guided tours, etc. It is expected that additional services will be launched this year. One of founders and CEO of Airbnb Brian Chesky said in an interview with Bloomberg Television: "Our main idea is that you want to see the city, to feel as if you live there. When people come somewhere, they want much more than just a house. They want to become part of the local life. And we focus on how we can help them flow into local life. " Mr. Chesky also noted that testing of such services goes well. Above that, Airbnb continues to develop new markets - the service’s growth in China amounted to 700% in the past year. 

Airbnb is often compared to another online service, Uber. Both companies are often mentioned as evangelists of "co-consumption economy". They develop services, built on use of mobile applications and high-speed Internet for fast and most flexible connection of a consumer and the service provider. In the financial sense, business models of Airbnb and Uber are quite different. Uber spends huge sums on business development and fight against competitors, while Airbnb is a rather "budget" business. Thus, in the first three quarters of last year, Uber’s losses amounted to $ 1.7 billion on revenue of $ 1.2 billion. Airbnb, in turn, since the service’s launch in 2008, had lost only $ 250 million; the company's revenues for the last year amounted to $ 1 billion. Uber actively attracts investments: within last round of raising funds, the company has received $ 5 billion. Uber also faces a much tougher competition: services similar to it are working in China (Didi Chuxing), USA (Lyft), Southeast Asia (Grab), India (Ola). Airbnb, on the other hand, has few rivals. Among them are a rather old HomeAway, services like Craigslist, as well as hotels.