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Record valuation for AirBnB

Funding of 1.5 billion dollars through investment funds, versus 6% of the corporate equity, revalues AirBnB at 25.5 billion dollars. This is the second valuation of a "hotel" group, after Hilton Worldwide, with a New York listing.

The capital was raised by the American investment funds, Global Atlantic and Tiger Global Management, in association with a Chinese fund, Hillhouse Capital Group. They are joining founders Brian Chesky and Joe Gebbi and the other funds that supported the group's development (Kleiner Perkins Caufiel & Byers, Temasek Holdins, Horizon Ventures and a Chinese fund Broadband Capital). This translates the financial community's confidence in an enterprise that produces all of its turnover through intermediation, without owning any real estate aside from real estate assets other than its headquarters.

The valuation is based on the conversion of the 35 million client database into cash and future profits, while the group's turnover did not surpass 850 million dollars in 2014 and the accounts are still in the red (150 million dollars in losses in 2014). Growth remains on the agenda so it may impose itself as an unavoidable player with the general public, while local authorities multiply increase controls and limitations of renters. Until today, AirBnB has announced around 1.5 million accommodations offers in close to 200 countries and 35,000 cities. 

The business grows through new local implantations and market expansion. After favoring vacation stays, AirBnB is now entering partnerships to attack the business travel market. Many companies are thus making AirBnB offers a part of their travel policies with new management tools that simplify reservations for a selection of accommodations with reporting and travel expense management.

Global hotel groups market capitalization vs AirBnB

Also read:

  • AirBnB worth $24 billion
  • Amsterdam regulates short term private rentals


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