Why This Venture Capitalist Says Now's The 'Perfect Time' For Airbnb IPO

Despite a global pandemic impacting the travel and hospitality industry, now is the "perfect time" for Airbnb to file for an initial public offering, Santosh Rao of Manhattan Venture Partners said on CNBC's "Worldwide Exchange."

What Happened: Airbnb filed confidential IPO paperwork Wednesday. The company has some positive tailwinds to show investors, Rao said.

Most notably, unlike Uber Technologies Inc UBER, Airbnb could be EBITDA-positive in "good times," he said. 

Airbnb is "very sound" financially and should emerge from the pandemic with a unique advantage to leverage its 7 million worldwide locations, Rao said, adding that travelers have shown a clear desire to seek out safer hospitality options to which they can drive. 

Manhattan Venture Partners is a mid-to-late stage investor in Airbnb. The venture capital firm bought stakes in Airbnb at multiple stages in recent years.

Why It's Important: Investor demand for private companies remains strong within the venture capital universe, Gao said. While there might be a slowdown in early stage or seed investing activity, later-stage financing of well-established companies is seeing good interest, he said. 

What's Next: Investors will realize that Airbnb is a "good company" with a strong market share, and it also boasts strong "mind share," Gao said.

Related Links:

Thursday's Market Minute: Airbnb Files IPO Paperwork

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Photo courtesy of Airbnb.