Photo: Suhaimi Abdullah/Getty Images for International New York Time / Illustration by The Hustle
Airbnb is back from the brink.
Seven months removed from one of the darkest periods in CEO Brian Chesky’s tenure at the helm, things are looking a lot rosier.
The pandemic’s abrupt arrival in March brought travel to a halt, and with it, Airbnb saw a devastating drop in business. During one stretch, bookings in Europe were down 80% vs. the same period in 2019.
Hosts across the US were left with a cascading run of cancellations that threatened to cripple the company’s critical partners.
Short on cash, Chesky laid off thousands
He refocused on Airbnb’s core travel business, scaling back aggressive bets like Experiences.
Chesky provided refunds to guests, then had to repair relations with hosts, using part of a $1B lifeline from private equity firm Silver Lake to help.
Slowly, things started to turn
While Americans weren’t traveling overseas as much, or even cross-country, remote work created a new demand for shorter distance stays.
Average stay length increased 18% to 4.27 days from January to June, while bookings recovered and outpaced 2019 levels during the same period.
With things back on track, the company recently filed to go public, setting the stage for a December IPO that will likely be one of the year’s hottest debuts.
Who’s getting paid?
Not me, but a lot of other people.
- Founders: Chesky and fellow cofounders Joe Gebbia and Nathan Blecharczyk are sitting pretty; Chesky’s stake is worth $3B to $4B.
- Early investors: Y Combinator scored a 6% stake for $20k (this bet is going in the VC hall of fame) and legendary VC firm Sequoia got in early at the seed ($600k) and Series A ($7.2m) rounds.
- Private Equity: Silver Lake lent the suddenly cash-strapped Airbnb $1B at an $18B valuation — roughly half what it was worth in 2017.
If this payday wasn’t enough, Airbnb just pulled a massive personnel coup, landing Apple’s former design chief, Sir Jony Ive.