The top home sharing company based in San Francisco, Airbnb Inc. is raising a huge lump of $850 million as disclosed to the State Delaware. This equity round elevates the valuation of the company to a whopping $30 billion.
Private stock market company Equidate, stipulated a 28 paged filing on July 28th. It raised an even bigger sum of 1.6 billion last year which lists in the biggest VC rounds in the history. After that this would be its second big raise.
This year saw some real big rounds. Uber did a $3.5 billion equity round with the support of Saudi Arabia's Public Investment Fund. Also Uber did another round of $1.15 billion in leveraged loans.
Despite being a late-stage company, the firm must be careful in taking capitals. A high equity can dilute the early investors while higher debt can put investors to risk if valuation falls . Debt must be paid before equity. Airbnb has raised more than a billion dollar without diluting its investors.
The previous valuation of the company was $27 billion. Thus despite this big round the company is intact on its anti-dilution strategies. According to the Wall Street Journal it rejected a deal which could raise its valuation to $34 billion.
Also investors intend to buy about $200 million in stock from employees via a buyback program. Buyback programs are a common thing for late-stage companies which try to look private while offering some liquidity to the early employees. Buyback programs only apply to common stocks.
The whole proceeding is taking place alongside with some legal battles of the company. The company recently sued San Francisco for a law to verify that the hosts have filed with the city before home advertisements.
We still are waiting for the official disclosures and further updates from the company.