Online rent-a-room venture valued at $1bn

Click to follow
The Independent Online

A San Francisco company that matches young tourists with homeowners who want to rent out their spare room for a few nights has become the latest internet sensation to attract a $1bn-plus valuation, on the heels of soaring interest in Facebook, LinkedIn and other social media companies.

Four-year-old Airbnb, which is expected to pass 1.8 million nights booked today or tomorrow, is raising $100m (£61m) for expansion in the UK and continental Europe, in a fundraising round that has attracted interest from many of Silicon Valley's top venture capital groups. Until recently, the company had raised just $7.8m, and last week it said that Ashton Kutcher, the film star-turned-technology investor, was making his largest ever investment in the company.

Co-founders Brian Chesky and Joe Gebbia, both industrial designers, came up with the idea for Airbnb when they shared a San Francisco loft apartment in 2007. They decided to make some extra money renting out a spare room when a design conference came to town, making hotel rooms scarce. Since then, people in 8,000 cities in 166 countries have listed their spare rooms or homes for rent on the website. Airbnb takes a cut of 6 to 12 per cent from the tourist and 3 per cent from the renter.

The company does not disclose any financial results, and declined to comment on the latest fundraising round, which was first reported by the Silicon Valley blog Techcrunch. Earlier investors in the company included Sequoia Capital and Mr Kutcher. The latest round is being led by Netscape founder Marc Andreessen's firm Andreessen Horowitz.

The $100m will bring in cash to expand Airbnb's presence in Europe and South America, including the UK, Germany, France, Argentina and Brazil.

Executives are expected to announce today that they have agreed to buy Accoleo, a similar website business that has been growing fast in Germany, to bring Accoleo's founding team into the company.

And Airbnb is also expected to dramatically expand its footprint in the UK before the end of the year, going from only one or two marketing staff now to up to 20 staff by next January. The company is presently showing almost 1,500 UK properties.

Earlier in his career, Mr Chesky was an industrial designer working on a Simon Cowell-produced television show for wannabe inventors. He is now the chief executive of Airbnb.

Mr Kutcher appeared at the TechCrunch Disrupt conference for start-up companies and investors in New York last week to promote his interest in Airbnb, and revealed he would be a consultant as the firm expands in Europe. The company said it would draw on the actor's experience as a pioneering user of Twitter and using social media to build his personal brand.

"They brought me on to help with marketing and branding, and taking the brand international, which is really important for them right now, because there are so many ex-US companies trying to chase what they are doing," Mr Kutcher said. "Our primary focus is working on the UK and Germany and starting to build the company there."

Comments