Room-rental service pitches big investors to raise new round of at least $500 million
Airbnb Inc. lined up investors for a new funding round and an employee stock sale that will value the room-rental website at up to $30 billion and help defer an initial public offering, said people familiar with the matter.
The San Francisco company plans to raise between $500 million and $1 billion from more than a half dozen large, investors in the coming weeks, the people said. The deal is expected to value Airbnb at about $30 billion, up from $25.5 billion a year ago.
One of the people familiar with the deal later clarified the company expects to raise up to $750 million.
In a separate transaction, investors are planning to buy about $200 million in stock from Airbnb employees, one person said. Because those investors will be purchasing common shares, rather than preferred shares which grant certain investor protections, the employee stock sale is expected to value Airbnb at less than $30 billion, the people said.
That transaction could value Airbnb as low as $25 billion, one of the people familiar with the deal said.
Airbnb designed the double-barrel deals to relieve some of the pressure to go public. By adding new cash, it can continue to spend on its global expansion; and by cashing out longtime employees, it can reward and retain top talent without an IPO. Over 500 of Airbnb’s roughly 2,500 employees are eligible to sell shares, according to one person familiar with the deal.
Airbnb has already selected investors and expects both deals to close this summer. It is unlikely to pursue an IPO in 2016 or 2017 as it continues to expand aggressively, the person said....MORE