Airbnb has raised $555 in order to reach the expected value of $850 million; this is a sign to show that the company is growing globally. A source which is close to the company confirms its earlier reports. The funding round is reported by the company named Alphabet, which is the parent company of Google.
This $550 million has risen towards $850 million, and the field is about to rise, because of this act. The round valued Airbnb at $30 billion and it has become one of the biggest startups in the recent years. It ranks fourth in the list of biggest startups.
The source also said that the Airbnb’s fund raising program has not stopped and it has to do some of the fillings. The round is led by the Google capital and the growth equity firm technology crossover ventures.
The employees who were working for Airbnb for more than four years are able to sell their shares to the investors, they result in $200 million, this is also the part of the deal, and this has become the best way for the companies to reward their employees.
Google capital is the back bone of the company for the equity funding; it has also invested in the companies like, SurveyMonkey, GlassDoor, care.com and Daulingo. Whereas the other company crossover ventures has invested in Facebook, SeetGeak, Dollar Shave Club, Netflix, vice, spotify and Harmony.
Airbnb’s previous investors are, Andreessen Horowitz, General Atlantic, Founders Fund and Hillhouse capital group. In the previous year Airbnb was valued at $25.6 billion, and today it was raised to $30 billion.
Let’s take a look at how Airbnb started and what made it possible to be in the list of the biggest startups.
In 2007, one of the design conferences were coming to the developer’s town, at that time there were no rooms available at the hotels, so they decided to change their loft as the lodge and make it available to the designers. They decided not to give advertisement in some other websites because it was very impersonal.
So, they designed their own website with the simple pictures of the loft which became lodged. And many people started asking for advance booking and some were asking that when this will be available in their town or city.
So the next step they decided to bring out the best in the site and had an idea of expanding it to the international level. People gave many ideas and suggestions to them, so they worked on the suggestions and came up with the better result than the first one. They said that, when they work on to solve their problem they are solving others problem also. They were anxious at the beginning and they do not know what is ahead of them.
Later, they got help from the former roommate and an engineer, Mr. Nathan Blecharczyk, to provide them with the air bed and the breakfast. Then the business started growing. In 2014, Airbnb had 10 million guests and the 550,000 properties around the globe and its value is $10 billion. It was above the top hotels in the list. The company received $776.4 million from the seven investors like, Y combinatory, sequoia capital, Keith Rabois, Andreesson Horowitz, Founders Fund, Ashton Kutcher and TPG growth.
Early growth
As they started Airbnb in 2008, the founders need money in order to develop this. So, they decided to sell the cereals with the special edition election boxes, named, Obama O’s and Cap’n McCain’s, they had 500 boxes and each box was sold for $40. They collected $30K from this. They used these funds for the Airbnb.
The site did not have much popularity initially, this period they called at the low point, but this low point did not continue for a longer period. Then Airbnb joined the Y combinators and received $20,000 in funding, then sequoia capital and Y ventures funded Airbnb with $600K. It serves as the example for; the startups have to do everything in order to get the popularity.
Gebbia and Chesky are the alumni of the Rhode Island school of design they were initially seeking for the funds from the fund providers, but everyone was looking for the high and well established companies, they refuse to fund for the startups. Though the company tried much to distinguish it from the more impersonal scam filled platform, the Craigslist believed that Airbnb did not have the huge user base. But Airbnb believed that, they will have more users, if they post on the Craigslist. So to enter into this market, Airbnb planned to display the properties listed on the Airbnb site, to be listed in the Craigslist as well, this policy was not sanctioned by Craigslist. The craigslist has the unique URL, and Airbnb was also given the unique URL, the property owners were given this URL in order to post their properties in the listings.
This happened in the beginning. Then the users were requested to fill several forms before posting their properties. The integration of the Airbnb and the Craigslist had many benefits. The major advantage is that, they had many customers; the properties in the Airbnb were superior to the other properties. The pictures were clear and they were the added advantage of the site. They were more pleasing to the Craigslist users, who was looking the sites for their vacation.
So these Craigslist users started to move to the Airbnb slowly, and Airbnb started to earn more money from the properties that were listed. While with that integration, Airbnb site has more traffic on the Craigslist, many users started posting their properties on the Airbnb, and it has gained more popularity.
The founder of Airbnb said that, they did not use the great SEO techniques for making their site more popular, and they did not advertise more on the social media, and they exactly don’t know what made them popular like this.
The founders noticed that the users use the camera phones to shoot their properties and display them on the Airbnb site, they thought that this will be of the poor quality, so they thought of renting a camera worth $5,000 and shoot the properties in New York, these properties were listed on the site of Airbnb. This approach has brought two to three times of the users in New York that before, by the end of the month the revenue of the Airbnb in the New York had doubled.
In addition to the New York, the company had the stunning growth in the Paris, London, Miami and Vancouver. This success has led to the launch of the Airbnb photography program in the 2010.
After this program was introduced, photographers were brought to capture the pictures of the properties. Initially 20 photographers were there to serve; later this program became an instant hit. This program has made them to earn nearly three times of the money than before. And it helped the hosts to earn upto $1025 per month. By 2012 the number had increased to 2000 photographers to capture the 13,000 listings.
This step by step improvement has made the Airbnb to achieve the great success that is to be one among the biggest private Startups.
Author Bio : Anand Rajendran is the Co-Founder and CEO of Jeato, one of the top most android app development companies in Chennai. He is also a digital marketing specialist who guides business companies to boost sales in internet marketing. Jeato, a Vacation Rental software product developed by this company called Homezu Script which is nothing but an Airbnb Clone Script which also comes with Android & iOS Apps .