Airbnb has targeted to go public sometime in December after confidentially filing for an IPO in August. The company will look to raise $3 billion.
In what has been a trailblazing year for newly public companies, we might see one of the biggest private names out there list before the end of 2020. Airbnb has announced plans to go public via IPO sometime in December. An anonymous source close to the company has said that the home rental disruptor is looking to raise as much as $3 billion from the IPO, which is targeted for after the U.S. presidential election. Be warned though, this timeline is subject to change and will depend on market conditions at the time. Heightened volatility from the fallout of the election could become a stickler to the company’s plans.
Airbnb will look to capitalize on the resurgence in its operations after COVID-19 originally put up some pretty significant roadblocks to its business. There were rumblings of the spare-room start-up reaching the public markets much earlier than this until the global pandemic decimated the travel industry. The fallout caused a significant haircut to Airbnb’s private valuation, from $31 billion down to $18 billion. It also led to the company letting go of 25% of its staff, as well as raising $2 billion in equity and debt in order to maintain its operations and prepare for significant drop-offs in revenue.
However, the company that originated from three air mattresses on the floor of the founders’ loft, has seen a significant turnaround in its business in recent months. The year of the staycation has led to a surge in demand for Airbnb’s platforms as holiday-goers seek more isolated stays and homes to themselves rather than hotels. There is also the surge in remote working that has allowed people to work and live from anywhere in the world. This pent-up demand has led to an estimated 22% increase in spend this July compared to last year, and a 75% improvement for the week of August 17 according to Edison Trends.
How much is Airbnb worth?
As mentioned earlier, Airbnb’s private valuation had fallen to $18 billion when it acquired $2 billion in emergency funding earlier this year. The most recent independent appraisal of the company’s valuation put it at $21 billion. However, sources close to the company said it could reach a valuation as high as $30 billion when it goes public.
As always, we’ll have to wait and see, but considering the hype surrounding some of the big IPOs this year and the brand recognition and weight that the name Airbnb has, it wouldn’t be too surprising to see another blockbuster public listing take Wall Street by storm in time for Christmas.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in Beyond Meat and Slack. Read our full disclosure policy here.