Home rental startup Airbnb announced Monday that it had raised $1 billion from private equity companies Silver Lake and Sixth Street Partners.
What Happened
The investment involves a combination of credit facility and equity, but the company didn't disclose further financial details.
"[I] want to thank Silver Lake and Sixth Street for their incredible partnership and support," Airbnb co-founder and CEO Brian Chesky said in a statement.
"They have a well-earned track record for being insightful thought partners who always have a strong sense of where the world is going."
Airbnb said it would invest the money in onboarding more "hosts," as the company refers to the people letting their properties on its platform. "Hosts are fundamental to what Airbnb is," it noted.
The San Francisco-based company will also focus on increasing the number of long-term stays booked through its platform.
Why It Matters
The investment comes at a time when Airbnb's business is severely impacted by the novel coronavirus (COVID-19) pandemic.
With authorities across the globe implementing widespread lockdowns, travel is mostly suspended, and demand for short-term rentals is drastically reduced.
Airbnb downgraded its internal valuation by 16% to $26 billion, the Financial Times reported Thursday.
Other companies in the industry that are publicly-traded have taken a tremendous hit at the stock market.
Booking Holdings Inc. BKNG was down 34.1% year-till-date at $1,353.27 on Monday's closing bell. Expedia Group Inc. EXPE was down 51.1% YTD at $52.84.
In March, Airbnb asked JP Morgan Chase & Co. JPM, Citigroup Inc. C, and other banks, to extend the deadline of a $1 billion credit facility it was granted in 2016 by another year.
Photo Credit: Public domain photo via Wikimedia.
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