Will Airbnb’s upcoming IPO make it one of the most valuable brands in the world?

Airbnb is filing for an IPO next week; let's take a closer look at its decade long journey.

Let me start with a story about two of the most successful venture capitalists in the world - Reid Hoffman (founder of Linkedin, sold it to Microsoft) & David Sze (an early backer of companies such as Linkedin, Facebook, etc). Both of them are & were partners at a marquee venture fund, Greylock when the Airbnb founders pitched to them. When Reid told his fellow Greylock investors that he wanted to go ahead with the investment, David Sze famously told him, "Well, every venture capitalist has to have a deal that doesn't work that they learn from. Airbnb can be yours." 

“Letting regular people rent out their homes to strangers would inevitably end in disaster, right?” How would a company like that build trust & avoid/manage all the risks that it is opening itself to? But Greylock went ahead with it due to Reid’s conviction and led a Series A round of $7.2 million in the company.

This was back in 2010. Now 10 years later, during a pandemic, Airbnb has not only been able to garner ‘trust’ by consumers globally but is also being used ‘heavily’ for long-term stays, escapades, and experiences AND is filing an IPO at a valuation of $30Billion USD! (expected to go live next week, in December!). For most startup founders, getting publicly listed is ‘the dream’ and for its investors, it is a massive, massive outcome & payday opportunity.

Let’s unravel Airbnb’s journey over the last decade.

Airbnb has more than 7 MILLION global listings; that is more supply than all the HUGE hospitality groups such as Marriott, Hilton, Hyatt, etc COMBINED. Coupled with massive supply, Airbnb has become an established ‘consumer’ brand with global awareness & demand. One can even argue that its brand equity is much superior to all the hotel brands because it’s more ‘accessible’ - and you can find places for every type of traveler.

As most hospitality and travel companies endured massive hits this year in their revenues (for most of the year seeing ZERO in revenues earlier this year, and occupancy still hovering at > 10-15%); Airbnb quietly paved its way to an IPO. They let go off of 25% of their team (in the most humane way a company could), cut down close to $1Billion in marketing expenses, and unleashed its true warrior spirit on us: Airbnb reported revenue of $1.34 billion for this year’s third quarter -- its second-biggest quarter ever; AND it reported a net profit of about $219 million!

As I thought about traveling during this pandemic, staying in hotels (without a pool, with other people, staff exposure) was not even an option in my head- it was all about private homes/spaces all to ourselves, and looks like this was the case for most people globally. With the promising numbers from the last quarter, the Airbnb IPO is expected to open up with a big bang. A lot of naysayers are waiting for Airbnb’s journey to unravel the same fate as WeWork & Uber, but from a performance perspective, Airbnb’s team has delivered and delivered consistently. I won’t be surprised if, 5 years from now, Airbnb’s valuation surpasses $100Billion or more. 

What do you think? Please share your thoughts/feedback in the comments or DM me on Twitter @shrishtie.

And as always, ending my post with a lil bit of hip hop:

"Stay far from timid, only make moves when your heart's in it, and live the phrase 'sky's the limit.'" --Notorious big A.K.A BIGGIE!