A number of seasoned investors are pitching Airbnb despite the hospitality industry getting slammed by the coronavirus, according to a report from CNBC, citing two sources familiar with the matter.
Airbnb is not in a cash crunch and is expected to weather this downturn with $3 billion in cash and $1 billion in credit. The company has raised a total of $4 billion and was planning to go public later this year either through an IPO or a direct listing, which means it would not sell new shares to public market investors. Direct listing allows the re-sale of shares held by company insiders such as employees, executives, and pre-IPO investors.
Airbnb has declined to comment, but Ron Conway, an early investor confirmed the interest to CNBC.
“Those investors are calling me saying, I hope Airbnb is raising right now because if they are, I want a seat at the table,” Conway told CNBC. “A lot of them are ones that went through the dotcom crash with me back in 1999 and 2000. The’yre the same people who were very wise and invested in companies like Google, Amazon and Apple. They’re saying, coming out of this downturn, it’s going to be companies like Airbnb that will be huge huge market performers.”
Conway said he didn’t know what valuation the offers would be looking at or whether Airbnb will accept a new round of funds, though he said the extra cash could be used to help it out of the downturn. Conway said Airbnb is more “nimble” than other travel companies like Expedia and Booking and will be able to “weather the storm.”
It is unclear if Airbnb will accept a new round of funds, but this overture from investors provides the company with more options. Airbnb would have a longer cash runway to weather the industry downturn which puts it in a much stronger position to compete. Also, the funding would give Airbnb an infusion of new cash if the company decides to go public through a direct listing. Without the pressure to look to the public markets for funding through an IPO, a direct listing could be a compelling option to let company employees cash out before their stock options expire this year.