Airbnb is looking to raise between $500 million to $1 billion dollars to see the company through this crisis.
The whole business world is in shambles right now to ensure that the negative aftermath of this pandemic is mitigated. No company is safe from the effects of people being told to stay at home.
This is especially true for the hospitality and lodging industry, which relies on the mobility of people for profits. A hospitality company owner has said that even government assistance is not enough.
Hotels around the world are keeping the lights on to keep the sense of business-as-usual. The reality is otherwise.
Companies must now rely on their own resourcefulness to pull through.
Airbnb is scrambling to get more funding
Similar to the hospitality industry, Airbnb is feeling the effects of the Coronavirus.
The home-sharing company is getting a one-two punch combination day after day by the Coronavirus. A report has said that 90% of all the bookings since the beginning of March were all canceled and refunded.
The idea behind the extra funding is to ensure that the company stays afloat and that it has extra funds for further acquisitions.
No source has confirmed as to what structure the extra funding has taken, but rumors speculate that it will be a first lien loan. This means that the holders of the credit shall be given a priority for payment in case Airbnb flounders.
The loan and credit line was facilitated and advised by the Silver Lake and Sixth Street Partners.
Postponed Initial Public Offering
2020 isn’t the year of Airbnb. They were initially planning to make their debut in the stock market anytime this year, with March and April as the start of the IPO process.
Outlook for that is dimmed by the Coronavirus. Moreover, the company also posted a loss of $322 million during the first nine months of 2019. This was a stark difference to the $200 million profit they made in 2018.
“You want to come in with your best foot forward in a public listing – and this virus is hitting Airbnb hard.”
Too big too fast
The skyrocketing ascent of the company since its introduction back in 2008 may be haunting the company this year.
Airbnb has reportedly spent massive amounts on legitimizing the listings on their site. Additionally, they have also been pouring funds in advertising and sales of the platform.
Presently the company has about 7 million listings across 100,000 cities in more than 200 countries around the world. They run these listings in over 34 offices in several regions of the world.
Images used courtesy of Airbnb/YouTube Screenshot