Airbnb to swing to net loss ahead of 2020 market launch
Rising costs at the home-rental company wipe out profits
Home-sharing company Airbnb lost millions over the course of 2019, swinging to a net loss ahead of its hotly anticipated IPO this year, on the back of rising costs, according to the Wall Street Journal.
The company recorded a $322 million net loss for the first nine months of 2019, compared with a $200-million profit in the same period in 2018.
According to the report, Airbnb was valued at $31 billion in a 2017 funding round, but could be worth less than this, the WSJ quoted sources as saying.
Airbnb had said last year it planned to go public this year. Market-watchers said its previous profitability had been expected to give it an edge with investors, particularly given the initial disappointment of some of 2019’s big tech IPOs, such as ride-hailing services Uber and Lyft, or virtual pinboard Pinterest.
Any listing this year would likely be in the third quarter or later.
The company reported a rise in revenue to $1.65 billion, but this was offset by rising costs.
After a string of safety incidents, including a fatal shooting in California last October that prompted the company to issue a global ban on “party houses”, Airbnb has been hit by growing expenses linked to security issues on its online platform.
Airbnb has increased the number of listings to over 7 million worldwide, from just one at its official launch back in 2008. According to the company’s website, around 2 million people are staying at one of its listings on any given night.
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