Class of 2020 | brali@wharton.upenn.edu

Airbnb, the tech start-up we all know for its impressive growth, is now valued at $31 billion. From the small platform that provided a service for people with/ looking for a place to stay, Airbnb has established itself as an international presence in offering hospitality services. After its Series F financing round that closed on March 9th, Airbnb reported that it had received more than $1 billion from investors such as Google Capital and Technology Crossover Ventures. As the fourth most valuable startup and the second most valuable hospitality provider, we are all wondering: When will Airbnb cash out and go public?

To answer that question, let’s take a look at Airbnb’s past rounds of financing. Starting in early 2009 when it first received $20k in seed capital, Airbnb has progressively increased the amount of capital it has raised in each round up to a maximum of $1.5 billion in its Series E. Although the startup did require $1 billion in debt financing from J.P. Morgan in 2016, since then the startup has become profitable and has had little issue acquiring capital.

With its recent rounds of acquired funds, Airbnb has ventured into new product areas. For example, Airbnb launched a service in 2016 that allowed “users to experience a city like a local.” Airbnb also moved into targeting specific groups of customers by acquiring Tilt funding platform and Luxury Retreats. Airbnb seems to be at the peak of performance right now, and an IPO may generate an influx of capital.

On the flip hand, Airbnb has also faced increasing scrutiny from federal regulators. Currently battling with San Francisco regulators about the legality, safety, and impact of Airbnb’s business, Airbnb has found itself embroiled in lawsuits, holding rallies, and implementing lobbying campaigns. Furthermore, international regulators have also begun to take notice of the expanding startup. In Barcelona, the city council essentially banned Airbnb when it asked for reporting of illegal rentals. With the current legal issues plaguing Airbnb, an IPO may also have the contrary effect and hurt Airbnb’s business.

Regardless, Airbnb’s early stage investors and employees are pushing for the company to go public. With their liquidity having decreased substantially after waiting on Airbnb for so long, the earliest investors and employees have succeeded in receiving a stock buyback program that totals around $200 million.

Therefore, it seems that Airbnb may go public soon. However, the company has stated that it has no intentions to soon. Access to capital is not an issue for Airbnb, as evidence in the latest financing rounds. Furthermore, private equity funds were at around $750 billion and venture capital funds were around $121 billion. Private funding is still a good option for Airbnb, and with its current legal troubles, there is no rush for the startup to go public. With its growth prospects and plan for expansion, Airbnb has no plans to go public soon, and it shouldn’t.