Spotlight On: Airbnb
Starting from a humble air mattress, Airbnb is one of Silicon Valley's biggest success stories. Founded in 2008 by friends Brian Chesky, Joe Gebbia, and Nathan Blecharczyk, Airbnb is now one of the biggest organizations in the world listed on the Nasdaq-100, with a market cap of $104.51 billion.
According to Tracxn, Airbnb has made 24 acquisitions and 13 investments since its founding in 2008. Most of these relate to accommodation and payment services Airbnb used for expansion.
How Does Airbnb Make Money?
Airbnb's primary revenue stream is from fees charged to guests and hosts for bookings. With listings "in more than 99,800 cities around the world" and six check-ins every second globally, Airbnb's fees make up a large portion of the company's multi-billion dollar annual revenue.
Airbnb also acts as a FOREX exchange, making a small margin for every conversion when users select a different currency from the property's default.
Unlike platforms like Booking.com and Expedia, which only charge fees to hosts, Airbnb adds fees to both ends of a booking—earning between 14% to 20% plus VAT where applicable.
Hosts pay Airbnb a 3% fee to cover transaction fees, while guests pay around 14% in service fees.
In 2016, Airbnb launched "Experiences," a tool allowing local guides to sell tours and activities. Airbnb charges a 20% service fee to Experience Hosts.
According to FourWeekMBA, Airbnb generated $6 billion in revenue from its $46.9 billion gross booking value.
Who Owns Airbnb?
Airbnb is a publicly-traded company with institutional, insider, and retail shareholders. According to Wall Street Zen, CEO and co-founder Brain Chesky is Airbnb's biggest insider shareholder, with an estimated 2.09%.
Notable institutional shareholders include FMR LLC, Vanguard Group, Morgan Stanley, and Blackrock, to name a few. Retail investors hold most of Airbnb's stock, totaling a little over 61%.
All three of Airbnb's founders are still involved in the company:
Check out Airbnb's org chart, including its board and advisors.
What Companies Have Airbnb invested in?
According to Crunchbase, Airbnb has made 18 investments up until April 2022.
- OYO: An Indian-based booking platform and global budget hotel chain. According to TechCrunch, Airbnb invested an undisclosed amount between $150 and $200 million.
- Zeus Living: An accommodation platform for business travelers. Airbnb invested in Zeus Living's Series B with several investors totaling $55 million.
- OneTrust: A privacy management software platform to operationalize data privacy compliance and privacy. Airbnb invested in OneTrust's Series C with several investors totaling $300 million.
- Tiqets: A cultural and travel experiences booking platform. Airbnb invested in Tiqets' Series C with several investors totaling $60 million.
- Resy: A New York-based hospitality tech company acquired by American Express. Airbnb invested in Resy's Series A with several investors totaling $13 million.
- The Wing: A network of work and community spaces designed for women. Airbnb invested in The Wing's Series C with several investors, including Sequoia Capital, totaling $75 million.
- Trala: A music education platform specializing in violin lessons. Airbnb invested in one of Trala's funding rounds with several investors, totaling $6.9 million.
What Companies Does Airbnb own?
According to Crunchbase, Airbnb has spent over $700 million on its 24 acquisitions as of April 2022. The company hasn't made an acquisition since it purchased Gaest.com in 2019.
- Luxury Retreats: A luxury holiday rental platform Airbnb acquired in February 2016 for $300 million.
- HotelTonight: A last-minute hotel booking platform Airbnb acquired in March 2019 for $400 million.
- Accomable: A platform for people with disabilities to find accessible holiday accommodation Airbnb acquired in 2017 for $439k.
- Proprly: An on-demand home cleaning and property management service Airbnb acquired in 2016.
- Troo.ly: A peer-to-peer trust rating service Airbnb acquired in 2017.
- Vamo: A vacation rental marketplace Airbnb acquired in 2015.
- AdBasis: An ad and marketing tool Airbnb acquired in November 2014.
- DailyBooth: A photo-blogging social media platform Airbnb acquired in July 2012.
- Lapka: A sensor manufacturer Airbnb acquired in 2015.
- Eliot: A property rental estimation tool Airbnb acquired in 2018.
- Localmind: A peer-to-peer location/travel Q&A social network Airbnb acquired in December 2012.
- Trip4Real: A Spanish-based travel experiences booking platform Airbnb acquired in September 2016.
- Luckey: A property listing management platform Airbnb acquired in June 2018.
- Crashpadder: A UK-based home rental platform (formerly Airbnb's biggest competitor) Airbnb acquired in March 2012 ahead of the London Olympics.
- NabeWise: A travel review platform Airbnb acquired in July 2012.
- Tilt: A crowd-funding platform for fundraising campaigns Airbnb acquired in February 2017.
- ChangeTip: A Bitcoin micropayments platform. Airbnb acquired ChangeTip's engineering team in April 2016.
- Gaest: An online platform for booking meeting rooms Airbnb acquired in January 2019.
- Minbox: A corporate SaaS tool for businesses to send and share files Airbnb acquired in June 2016.
- Deco Software: An IDE for mobile software development Airbnb acquired in May 2017.
- Pencil Labs: The parent company of the scheduling app Wyth Airbnb acquired in December 2014.
- Fondu: A Yelp-type review platform Airbnb acquired in October 2012 for $575k.
- Accoleo: A German-based home rental platform Airbnb acquired in June 2011.
- Urbandoor: A business-focused accommodation booking platform Airbnb acquired in August 2019.
Does Airbnb Own HomeAway?
Expedia owns HomeAway. The travel giant purchased VRBO, including its subsidiary HomeAway in 2016 for $3.9 billion, allowing it to compete directly with Airbnb. VRBO had initially acquired HomeAway in 2006 for an undisclosed amount.
Who is Airbnb's Biggest Competitor?
Expedia and Booking.com are two of Airbnb's biggest competitors. Expedia owns VRBO and HomeAway, which compete directly with Airbnb.
Booking.com was initially favored for booking hotels, resorts, and similar establishments, but the product has evolved to accommodate private listings like homes and apartments. According to Rentals United, Booking.com has over 6 million private properties, more than VRBO and HomeAway combined.
Who are Airbnb's Partners?
Airbnb partners with many software companies, allowing hosts to manage their listings more efficiently.
Additionally, Airbnb has partnerships for various initiatives, including the Red Cross, Adventure Travel Trade Association, Pan American Health Organization, and animal welfare organizations.