Airbnb’s first earnings, behind CBRE’s $200M bet on Industrious

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Mar.March 01, 2021 08:30 AM

Earnings redux: Airbnb, CoStar, Redfin

? It could have been worse. That was the takeaway from Airbnb’s first earnings as a public company.

Despite the luster of its eye-popping IPO, Airbnb lost $4.6 billion in 2020 and revenue dropped 30 percent year over year to $3.4 billion. The net loss was driven by $2.8 billion in stock compensation related to the IPO, but the pandemic clearly whalloped the travel industry.

CEO Brian Chesky used a Feb. 25 earnings call to outline ways Airbnb has adapted. “We don’t think we’re ever going back to the world of travel in 2019,” he said. Travelers are booking extended weekends, local stays or traveling for weeks or months at a time.

? Where have all the houses gone? Thanks to a red-hot housing market, Redfin’s revenue soared 14 percent in 2020 to $866.1 million. It lost $18.3 million compared to a loss of $80.3 million in 2019. The key challenge now? No inventory and too-few agents.

CEO Glenn Kelman said the firm is hiring agents “faster than ever.” Ahead of its earnings report, Redfin announced a deal to buy RentPath for $608 million, betting on rentals to expand its perch.

? Has CoStar ever had a bad quarter? Asking for a friend. The data giant posted $1.66 billion in revenue, up 19 percent year over year. Net income plunged 28 percent to $227 million, from $314.9 million in 2019.

With $2.7 billion in debt and equity on its balance sheet, CoStar has its eye on more M&A. Earlier this month, CoStar submitted a bid to buy CoreLogic for $6.9 billion, 20 percent higher than CoreLogic’s previously accepted offer from Stone Point Capital and Insight Partners.

“The housing market is now like a Soviet-era supermarket with most of the shelves empty.”

— CEO Glenn Kelman

The flight to flex office

Industrious has a powerful new backer: CBRE, which acquired a 35 percent stake in the flex-office startup last week for $200 million.

The deal, which values Industrious north of $600 million, is another feather in the cap of flexible work spaces.

CEO Jamie Hodari said the deal validated Industrious’ business model, which is based on management agreements with landlords instead of traditional leases. “It’s partly why we’ve been able to spend the last year planting while others were pruning,” he told Bloomberg News.

For CBRE, it’s another tool in its return-to-the-office arsenal. During a Feb, 24 earnings call, CEO Bob Sulentic evoked the “asset-light” trend that’s taking over the office market.

“They have an asset-light model,” he said of Industrious. “That means that they provide flex space as a service.”

SoftBank and Adam Neumann may bury the hatchet

SoftBank’s brawl with WeWork co-founder Adam Neumann is nearing an end.

The parties are close to a settlement, in which the Japanese tech giant would spend $1.5 billion to buy out early WeWork investors, including $500 million from Neumann (about half what it initially planned to buy). Under the deal, Neumann would get an extra $50 million but leave WeWork’s board for a year, according to reports.

Behind the news are two key takeaways: One, a settlement would help the parties avoid a trial after Neumann sued SoftBank last year. (The trial was set for March 4.) And two, it could pave the way for WeWork’s second attempt at an IPO. WeWork has been in talks with special-purpose acquisition company BowX Acquisition Corp., the Wall Street Journal reported.



Ratio of SPAC IPO versus traditional public offers in 2021, according to Renaissance Capital

Renting a desk for less

Part of WeWork’s turnaround includes lower prices.

The flexible-office firm slashed prices for desks and small offices in November and in January, according to Bloomberg News. Discounts ranged between 5 percent and 25 percent, with an average discount of 10 percent. Although the discounts weren’t advertised on WeWork’s website, they were found within its source code, according to an analyst who compiled the data for Bloomberg.

CEO Sandeep Mathrani has been getting WeWork back on its feet after its failed IPO in 2019. WeWork has cut costs and is evaluating underperforming locations.

But the office backdrop is uncertain. Office rents have dropped, and according to CBRE, they could drop 7 percent more by 2022 before rebounding.

Can you hear me now?

With everything from doorbells to light fixtures powered by WiFi, startup Plume has raised $270 million from private equity firm Insight Partners to accelerate growth.

The round valued the Palo Alto startup at $1.35 billion. Plume optimizes broadband connectivity in homes, but also offers internet security features and controls for home networks. Its services are offered through providers like Comcast, and its technology is in 22 million households worldwide, CEO Fahri Diner told Reuters. The new funds will be used to invest in R&D and grow the business globally.

Investors pump $20M into office-planning startup

Grappling with return-to-work questions? Enter Saltmine.

The San Francisco startup, which helps businesses optimize office space, has raised $20 million amid an influx of inquiries about how to set up offices post-Covid. The round was led by Jungle Ventures and Xplorer Capital, with participation from JLL Spark, which will also sell Saltmine’s services to its commercial brokerage clients.

Founded in 2017, Saltmine’s platform houses workplace data, and its tools can help establish social-distancing measures using 3D renderings. The platform also helps companies optimize their real estate portfolios. To date, Saltmine has designed and analyzed 50 million square feet across 1,500 projects. Clients include PG&E, Snowflake and Workday.

The startup saw an 80 percent jump in annual recurring revenue last year, founder and CEO Shagufta Anurag told TechCrunch.

Small bytes

? Compass’ Robert Reffkin was among the 50 men who signed a letter calling on Congress to support a “Marshall Plan for Moms,” to pass policies addressing parental leave, affordable childcare and pay equity.
? Zillow promoted Susan Daimler to president as part of an “organizational realignment.” The former GM of StreetEasy replaces Jeremy Wacksman, now the company’s COO.
? Knock, a startup that helps homeowners move before they sell their home, entered California via a partnership with luxury brokerage The Agency.
? Blocpower, a Brooklyn energy startup that develops green buildings, raised $8M in equity and $55M in debt.
? Sunroom Rentals, an Austin-based apartment leasing platform, closed an $11M Series A led by Gigafund.
? EarnUp, a San Francisco startup that automates loan payments to help financially strapped homeowners, raised $25M.
? Foxtrot Market, a corner store with delivery, closed a $42B round led by Almanac Insights and Monogram Capital. Fifth Wall is an investor, along with chef Daniel Chang and former Whole Foods CEO Walter Robb.

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