July 22, 2017

It’s been a trip to $31 billion. Now Airbnb wants to remake the entire travel industry

Airbnb Open 2016 – Trips Keynote
Image Courtesy of AirBnb

Airbnb is unusual among privately held start-ups in that it’s already profitable .

The No. 1 company on the 2017 CNBC Disruptor 50 list has reportedly said it can reach $3 billion in profit by 2020. It was valued at $31 billion last year, meaning that only Marriott ‘s $39 billion valuation is greater in the lodging industry.

But after forcing the biggest changes in travel since Priceline and Expedia, it’s running out of easy room to grow against the lodging companies. To keep up its rapid growth, Airbnb needs to upend the entire travel experience.

Airbnb’s recent $1 billion round of financing was huge, but also showed its lowest valuation step-up — a measure of valuation increase from financing round to round — in the history of the company. In its 2014 Series D, Airbnb’s valuation increased at almost three times the rate of the median start-up at that stage. In its first quarter 2017 Series F, Airbnb’s valuation increase was barely above the median rate, according to data from venture capital research firm PitchBook.

Dan Cook, a PitchBook senior analyst, said when growth stops accelerating and begins to level off, it’s harder to maintain huge valuation step-ups.

“Airbnb supply is still growing […]

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