HN Explorer

Ask HN: Why did AirBnB raise $100million?

4 points by alttab ↗ HN
So by now we've all seen the news that AirBnB has a valuation over a billion dollars, raising $100 million for a website connecting people who want to rent out their space and those that are looking for it.

OK, so they are running a market-place web-site. They hold no inventory, do no physical distribution, and if they ate their own dog food they would have very little overhead.

Now, I know they probably have (plans for) a large marketing team, a dedicated PR team, some engineers, and executive management. But just because they COULD raise $100 million, doesn't mean they SHOULD.

What are they using this money for? Is this considered a 'lean' round given their plans? Why hasn't the coverage of AirBnB gone into more depth of their business plan, or any sort of justification on this valuation and funding?

They may have a good run rate, revenue, etc, but I still can't see a clear reason a web-site would need to raise that much money in one go.

Is there anyone else who knows more behind this deal? With the recent IPOs, and Techcrunch already covering AirBnB-like verticals, I think understanding the drive behind the money (if any) is valuable for everyone in the industry to keep their head on straight...

6 comments

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maxdemarzi
They probably cashed out early with part of that round like Groupon and Living Social.
tilt
So far they acquired a Germany based competitor to start their european HQ. Guess the next closest step will be expanding in EU market.
petervandijck
Because they can.
actionbrandon
My comment exactly. It would be insane to not take advantage of the valuations in the market right now. I would have a hard time sleeping if I was a founder right now. One big round, and then a race to an IPO before the party is over.
happyfeet
They need lot of cash in hand to spread wider & penetrate the hotel market; and probably to fight enough lobbying groups that might resist such large scale disruption of market.
baggins
Marketing. They need more inventory IMO. Many of my favorite destinations are sorely lacking in AirBnB rentals.