Airbnb, a community marketplace for people to list, discover, and book unique accommodations around the world online announced it has secured investment worth $1 billion from equity firms Silver Lake and Sixth Street Partners. The investment will bolster its finances at a time when the coronavirus outbreak has roiled the travel and leisure industry.
The company said it would use the funds primarily to attract more hosts, or homeowners who list their properties for rent on the company’s platform. The investment, which was a mixture of debt and equity, raises Airbnb’s cash reserves to around $4 billion.
Silver Lake and Sixth Street were among around 20 investors which approached Airbnb about investing in the company, according to people familiar with the matter, reported in a media report.
“While the current environment is clearly a difficult one for the hospitality industry, the desire to travel and have authentic experiences is fundamental and enduring. Airbnb’s diverse, global, and resilient business model is particularly well suited to prosper as the world inevitably recovers and we all get back out to experience it,” Silver Lake Co-CEO and Managing Partner Egon Durban said in a statement.
Financial details of the deal were not disclosed. Airbnb lowered its internal valuation by 16% to $26 billion in early March, Reuters reported.
In response to travel bans and a surge of requests for cancellations, Airbnb said last week that it was allocating $250 million to help offset losses incurred by hosts.
In March, Reuters reported that the short-term home rental platform held a phone meeting with bankers to discuss extending an existing $1 billion debt facility amid a slowdown in demand due to the coronavirus pandemic.
The company also said that $5 million from the Silver Lake and Sixth Street investment will be contributed to a relief fund for hosts in need of financial assistance.
Airbnb also plans to invest in its business for longer-term stays which can be for several months and is targeted at students or employees on extended work assignments.
Airbnb connects people to unique travel experiences, at any price point, in more than 33,000 cities and 192 countries. Headquartered in San Francisco, the company has satellite offices in Dublin, London, Barcelona, Paris, Milan, Copenhagen, Berlin, Moscow, São Paulo, Sydney, and Singapore.
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