Newspaper article International New York Times

Airbnb Value May Exceed $10 Billion

Newspaper article International New York Times

Airbnb Value May Exceed $10 Billion

Article excerpt

Airbnb, the private rentals website, is in advanced talks to raise over $400 million in capital, a round of financing that would value it at more than $10 billion.

Airbnb is poised to join the 11-digit club.

The company, which was created as a way to help people find spare rooms and couches to sleep on, is in advanced talks to raise more than $400 million in capital, a round of financing that would value it at more than $10 billion, people briefed on the matter said on Thursday.

Such a valuation would surpass that of Hyatt, the 57-year-old hotel stalwart, and make Airbnb the latest technology start-up firm to gain an eye-popping net worth. Investors hungry for a piece of the fastest-growing start-ups have opened their wallets, hoping to get even a small piece of the action before what they hope will be a giant payday.

But Airbnb is also drawing increasing scrutiny from regulators concerned about safety, rental laws and tax collections. The company has become a point of contention among landlords in big cities, as well.

Leading the potential new fund-raising round is TPG Growth, the investment firm that already has a stake in the car-ride service Uber, the people briefed on the matter said. Other prospective investors include the Dragoneer Investment Group and T. Rowe Price, one of these people added.

The discussions, which were first reported by The Wall Street Journal, are continuing and may still fall apart, these people cautioned.

Despite murmurs of a new technology bubble, valuations appear to be rising unchecked. Last month, Facebook -- itself worth nearly $170 billion -- paid more than $16 billion for the messaging service WhatsApp, a bid that some analysts have described as reasonable given the acquired company's growth prospects. Dropbox, a provider of online storage, has been appraised at about $10 billion, while Palantir, a sophisticated data analysis firm, has raised money at a $9 billion valuation.

The pace of investments appears to be accelerating. Venture capital firms spent $8 billion in the last three months of 2013 investing in the likes of Pinterest, the social network, according to data from CB Insights. …

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