Airbnb raises another $1 billion to become second most valued startup

Company - Vinay Mishra - Mar 10,2017

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airbnb raises another 1 billion to become second most valued startup

Airbnb now valued at $31 billion could use this funding to expand operations globally and for further acquisitions and investments.

Airbnb has raised another $1 billion in the latest round of financing. This financing valued Airbnb at $31 billion. Making it the second-most valuable start-up in the U.S., only behind Uber.

Airbnb became profitable in the latter half of 2016 and is expected to continue to be profitable in 2017 before interest, taxes, and amortization. The company is not planning an initial public offering anytime soon.

Airbnb is an online marketplace for hospitality service that helps people to list and rent short-term lodging including homestays, apartment rentals, vacation rentals, hostel beds, and hotel rooms. It was founded by university friends Brian Chesky and Joe Gebbia in 2008 to help them pay rent for their San Francisco apartment.

Airbnb offers more than 3 million short-term rentals across 65,000 cities in 191 countries. The company does not own any assets, it acts as a broker and receives a percentage as commissions. It charges about 3 percent from renters for each booking and from guests it charges between 6% and 12%.

Till date, Airbnb has raised around $3 billion from all rounds of funding. For the latest round of funding, the investors have not been disclosed. However, some earlier investors include Alphabet Inc. investment arm CapitalG, Technology Crossover Ventures, Andreessen Horowitz, Hillhouse, and Peter Thiel’s Founders Fund.

Although details are not available on how Airbnb would use these funds. But it’s likely that it will try to expand operations globally focusing on India. Cash could also be used for further acquisitions and investments. Recently Airbnb acquired Luxury Retreats, a Canadian company for about $200 million.

Recently another fellow San Francisco-based startup Instacart also raised $400 million, which valued the on-demand grocery delivery service at $3.4 billion.