Airbnb Raises Another $1B In Second Funding In A Week As Pandemic Hurts Business

Airbnb Inc. has raised $1 billion in a second funding round in just over a week, the home-rental company announced Tuesday.

What Happened

The San Francisco-based company had previously announced a $1 billion funding from Silver Lake and Sixth Street Partners.

Airbnb said the latest funding is raised from "institutional investors," but didn't disclose the name of the funders.

According to a report by the Financial Times, both Silver Lake and Sixth Street participated in the latest funding as well, alongside Apollo Global Management and Owl Rock Capital.

The funding is a 5-year debt facility, the FT reported, and the startup was advised by Goldman Sachs Group Inc. GS and Morgan Stanley MS on the investment.

"I deeply appreciate the confidence and trust that so many have shown in our company even as every sector in travel is going through the storm of the pandemic," Airbnb Co-Founder and CEO Brian Chesky said in a statement.

"We know travel will return and rather than merely hunkering down, the support we have received will allow Airbnb to continue moving forward as we invest in our community."

Why It Matters

The novel coronavirus (COVID-19) pandemic has significantly impacted the travel and hospitality sectors, and Airbnb is no exception.

Other companies offering similar services and are publicly traded have taken a beating at the stock market. Booking Holdings Inc. BKNG is down 29.5% year-till-date, and Expedia Group Inc. EXPE is down 43.1%.

As earlier reported by the Wall Street Journal and confirmed by the FT, Airbnb is paying an interest rate of more than 10% on these investments. The startup has been valued at $18 billion as part of the investments, significantly lower than the $31 billion it was valued at in its last funding round in 2017.

The company earlier in March also asked lenders to extend the deadline of a $1 billion debt facility granted in 2016 by another year.