Airbnb, the service that lists spare rooms as an alternative to hotels, is apparently looking to close a $1 billion round of funding at a valuation of $24 billion.
The company is using its ambitious revenue forecast of $900 million for 2015, up from $850 million thanks to its better than expected first quarter results, to justify its valuation.
According to WSJ, the company’s revenues are expected to grow to $10bn in 2020, and forecasts predict that the company will become profitable, reaching $3bn in EBITDA.
Current forecasts, however, predict that Airbnb will lose $150mn in 2015 as it burns cash feed its rapid global expansion and fighting city and tax regulators.
If the company is able to raise funds at the desired valuation, Airbnb will be larger than luxury hotel chain Marriot which has over 4,000 properties and reported $13.8bn in revenues last year.
Airbnb’s value would also eclipse Expedia by over 2x which seems odd given that the company’s 2015 revenue forecasts stand at $6.5bn and earnings of $1.1bn.However, Airbnb is growing at a much faster rate of nearly 90% y-o-y as opposed to Expedia’s 17%, which the company will undoubtedly use in fetching its $24bn valuation.
However, Airbnb is growing at a much faster rate of nearly 90% y-o-y as opposed to Expedia’s 17%, which the company will undoubtedly use in fetching its $24bn valuation.