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Airbnb aims for $35 billion valuation in IPO offering

written by Bella Palmer
airbnb

Investors have signalled that they expect vaccines to put an end to the pandemic, and anticipate a surge of travel

Airbnb is aiming for a valuation of up to $34.8 billion in its initial public offering, in what would cap a stunning recovery of fortunes after the business was heavily damaged by the COVID-19 pandemic earlier this year.

In a regulatory filing Tuesday, Airbnb set a target share price range of between $44 and $50 to sell 51.9 million shares, which would pull in up to $2.85 billion at the upper end of the range.

At the top of Airbnb's target range, the IPO will give Airbnb a valuation of $34.8 billion, nearly double the $18 billion Airbnb was worth in an April private fundraising round and above the $31 billion in its last pre-COVID-19 private fundraising in 2017.

Investors have signalled that they expect vaccines to soon put an end to the pandemic, and anticipate a surge of travel as normal life resumes next year.

Of the shares being sold, Airbnb founders Brian Chesky, Joe Gebbia and Nathan Blecharczyk will together sell nearly $100 million worth of shares in the IPO launch.

Airbnb struggled in the immediate aftermath of the pandemic as travel came to a grinding halt. It had to lay off a quarter of its workforce and seek $2 billion in emergency funding from investors, including private equity firms Silver Lake and Sixth Street Partners.

But as lockdowns eased, more travellers opted to book homes instead of hotels, helping Airbnb post a surprise profit for the third quarter. The San Francisco-based firm also gained from increased interest in renting homes away from major cities.

Looking at Airbnb there's a lot to like. The company's third quarter has shown they've bounced back better than a lot of their travel rivals, said Matthew Kennedy, senior strategist at IPO research firm Renaissance Capital.

Airbnb's market capitalization at $50 per share would total $29.8 billion. Chesky's stake would be valued at about $3.8 billion, while those of Gebbia and Blecharczyk would be worth about $3.5 billion each. Sequoia Capital, which first invested in Airbnb in 2009, would have a stake worth more than $4 billion.

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