Airbnb’s latest $1B raise may dash IPO plans
The company, which planned to go public in 2020, has seen its valuation drop to a reported $18B
Airbnb raised $1 billion in debt, on the heels of another massive haul last week.
The short-term rental company is issuing first-lien debt, which is collateralized by the company’s assets should it default, according to Bloomberg. Silver Lake — which led last week’s $1 billion raise — and BlackRock, Eaton Vance Corp., Fidelity Investments, T. Rowe Price Group, Apollo Global Management and Blackstone Group are among those participating in the round.
The company confirmed the $1 billion syndicated loan to Bloomberg, but didn’t name investors.
Last week, Airbnb raised another $1 billion from some of the same companies. In exchange, the home-share platform agreed to pay an interest rate of 10 percent. Investors Silver Lake and Sixth Street Partners denied reports that the deal also required Airbnb to cut fixed costs and add new management.
The previous deal also valued Airbnb at $18 billion, down from $31 billion aftering a funding round in 2017.
Airbnb, like other hospitality companies, has been battered by the coronavirus pandemic.
In March, Airbnb faced backlash from hosts for changing its cancellation policy in response to Covid-19 to offer guests full refunds without penalties. The startup’s CEO announced a relief package and issued an apology. It has also halved executive pay, halted all marketing and hiring efforts, and called for federal aid.
Before the global pandemic, Airbnb had been planning an initial public offering for 2020. [Bloomberg] — Georgia Kromrei