Almost two months after rumours first surfaced of a mammoth funding round, Airbnb has finally completed its Series B injection of $112 million in capital.
The round was financed by Andressen Horowitz, DST Global and General Catalyst and is over $20 million more than the $90 million secured by rival Wimdu in mid-June.
The latest round brings the total level of capital thrown into Airbnb so far to $119.8 million, illustrating the massive jump between the initial investment and the new support from Andressen et al.
Airbnb says the round will be used specifically to expand the business globally and capitalise on demand in countries outside of its home market of the US such as the UK, Germany, France and Brazil.
The company couldn’t have chosen more high profile backers from the US web investment community, with Andressen counting Facebook, Foursquare, Groupon, Skype and Twitter on its portfolio, and General Catalyst supporting Kayak, ITA Software, Room 77 and Ostrovok.
Airbnb’s growth in the last 12 months has clearly caught the eye and praise not only of the tech press in the US but major players such as Andressen, with its general partner Jeff Jordan moved enough to compare the business to none other than online auction giant eBay.
“Airbnb’s explosive growth and passionate community of users reinforce the uniqueness of what they’re doing, and in the same way eBay redefined online shopping, Airbnb is redefining the way the world thinks about accommodations.”
DST Global’s Yuri Milner calls Airbnb a “transformational company”.
The numbers are certainly on Airbnb’s side. It claims to have booked two million room nights so far, captures 30 million page views every month and a “social connections” feature added to the site in May this year has already reached 54 million.
But while the company has managed to secure pages of gushing coverage from the US media, helped not least by securing the services of Hollywood celeb Ashton Kutcher as a board member, some of its tactics to attract new property owners have come under fire.
Airbnb admitted in June 2011 that a rogue group of contract sales people had used Craigslist to make unsolicited approaches to owners to persuade them to sign up to the service.
Away from the (somewhat justified) hype surrounding Airbnb, other companies operating in the vacation rental market will no doubt be absorbing today’s announcement with mixed feelings.
Big players with vast financial warchests for growth and additional resources is likely to concern many of the smaller players, but two significant rounds of investment in recent months (Airbnb and Wimdu) illustrate the enthusiasm in the finance community that private rentals is one of the hot sectors of the industry in the coming years, a trail blazed long before Airbnb by Homeaway and more recently by TripAdvisor.
Brian Chesky, co-founder and CEO of Airbnb says:
“Today is a watershed moment – both for Airbnb as a company and for our community – that will enable us to touch new markets and expand our vision to make the world’s most interesting and inspiring places accessible to our users.”
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About Kevin May
This is a massive funding round and I am curious how well AirBnB will be able to put the capital at work in a variety of new markets (Europe, Asia etc.). Although it always sounds great towards investors to “scale globally”, entering several markets at once is a tremendous challenge that only few (travel) companies have successfully mastered so far. Given that Jeff Bezos is among the investors in this round and Amazon is the model company for fast paced global execution, I am looking forward to see the model evolve internationally!
I hope homeaway uses second porch properly and shows these kids how it should be done…
hahahaha
After having followed them and knowing high end directors within the group this is a great gamble if people want accommodation such as eBay ad craigslist which I still fis a dubious as Gumtree and similar unchallenged directories. it is missing crucial elements for success and they are currently chador the Chinese Market which yea may be big but it’s also a different model and different behaviour. So a free directory can beat them and threre are many room share clones and Market leaders in local markets. The real business is travel and with airbnb adding 20% to the users and 10% torhe owners cost then it’s not an eBay and it’s not a new Paypal. But is it travel? Have you tried finding a flat on there where you don’t share a room and where you can bring a girlfriend or partner?
It depends on how good you are looking! I am a B&B owner listed on Airbnb. I have private rooms with baths and you can always bring a guest. You also get a hot breakfast each morning that you do not have to cook yourself.
Just rent a property instead of a room. Problem solved.