Airbnb CEO Brian Chesky believes 2020 will be the “right time” for the short-term rental company to go public but also raised the prospect of a direct listing after claiming it doesn’t need money to drive long term success.
Speaking to CNBC’s Jim Cramer on Monday, Chesky said he often sees companies “rushing” to hold an initial public offering and that the impatience is often borne out of a desire to quickly raise funds and support cash flow.
Airbnb posted revenue in excess of $1bn during Q2 2019, the second time it has hit that milestone and has raised $4.4bn in numerous venture capital funding rounds since being founded a decade ago.
Private investors now value the company at around $31bn, but analysts are still unsure if it can operate in the black or whether there is a clear path to profitability.
Airbnb was tipped to make its US public debut this year alongside Lyft and Uber but the subpar showings for both of those companies in H1 2019 — currently down 40% and 35% on opening prices respectively — may have been a factor in them holding off.
Chesky said during a ‘Mad Money’ segment that Airbnb was still “not ready” to announce any details about an IPO and suggested a non-traditional route could be in the offing next year.
“Our large shareholders, most of our large investors, have told us they intended to hold the stock for a long time and they actually were doing the opposite of pressuring us to go public,” Chesky noted.
A direct listing in 2020 would see Airbnb underwrite its own securities without the help of middlemen — a cost-effective approach that was also pursued by Spotify (NYSE:SPOT) and Slack (NYSE:WORK) when going public.
Reports suggest Goldman Sachs and Morgan Stanley may take the lead on such a deal.
Airbnb does appear to be getting closer to a market debut as the nine-year $500m partnership with the International Olympic Committee announced on Tuesday ahead of next summer’s 2020 games in Tokyo suggests the company is building its brand image.
Market watchers have suggested the strategic move shows Airbnb is ready to move into the big league alongside other major brands including Coca-Cola (NYSE:KO) and Toyota (LON:TYT).
IOC president Thomas Bach said the deal would see Airbnb supply “guaranteed” accommodation in host countries for Olympic events during the next decade including the main games in Paris 2024 and Los Angeles 2028.
The prestige of featuring in the Olympic sponsorship programme with 12 other sponsors is certain to increase brand awareness and reach as the summer games attract a huge number of viewers across a variety of platforms in markets around the world.