Airbnb Raises $1 Billion From Private Equity Firms
At a time when industries have been suffering due to the COVID-19 pandemic, Airbnb has had a silver lining!
On Monday, Airbnb said that it has raised $1 billion in debt and equity from private equity firms Silver Lake and Sixth Street Partners. This was amid the online rental marketplace seeing its business plummet due to the COVID-19 pandemic.
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Although the terms of the deal were not disclosed, it’s quite vague as to how this funding might alter Airbnb’s plans to go public previously. Amid the outbreak of the COVID-19 outbreak, governments have been prompted to stay at home throughout the world, also triggering a wave of cancellations in the travel and hospitality industries.
It has also been emphasized by Airbnb that its ongoing work to invest in over the long term would be supported by funds. This statement was being aimed at couching this raise as strategic and not a bailout in troubled times.
As per a press statement by Airbnb, they said that while the current environment is a difficult one for the hospitality industry, yet the desire to travel and have authentic experiences is fundamental and quite enduring. This was being said by Silver Lake co-CEO and managing partner Egon Durban. It was also stated that Airbnb’s diverse, global, and resilient business model is much well suited to prosper, as the world inevitably recovers and that everyone would get back out to experience it.
Brian Chesky, CEO, Airbnb said that the desire to connect and travel has been reinforced during this time and that the way it would manifest would evolve as the world would change. Airbnb is also taking a look at how and where people work would be evolving. It has also said that it would be directing its attention and new funds towards three core which are hosts, long-term stays and Airbnb experiences.
Also last month, Airbnb said that it would be directing $250 million to help out hosts, that have been impacted by COVID-19. Through this, the funds would be used to pay a host 25 percent of what they would normally receive through their cancellation policy, where if a guest cancels a reservation due to the COVID-19 pandemic between the dates March 14 and May 31.
A lot of hosts have been complaining about Airbnb’s policy where earlier guests would cancel reservations and receive a full refund. This move by Airbnb was to make amends in its policy and also to appease the hosts.
