- Airbnb revealed on Monday that it is taking a billion dollars in new investment in order to tackle in a travel world changed by the coronavirus pandemic.
Airbnb revealed on Monday that it is taking a billion dollars in new investment in order to tackle in a travel world changed by the coronavirus pandemic.
According to Airbnb, Silver Lake and Sixth Street Partners will invest the capital in the form of debt and equity into the home-sharing site.
“While the current climate for the hospitality industry is obviously a tough one, the urge to travel and have authentic experiences is fundamental and lasting,” Silver Lake managing partner Egon Durban said in a statement.
“Airbnb’s dynamic, global, and resilient business model is especially well-suited to succeed as the world eventually recovers and we all come back to experience it.” According to Airbnb co-founder and chief Brian Chesky, the fresh capital would allow the San Francisco-based company to invest in its “host” community as well as local experiences offered along with homestays.
Airbnb said it would concentrate in particular on long-term stays, from students in need of accommodation to remote staff, building on the increasing demand that the site has seen during the pandemic as people self-isolate.
Investment terms include putting $5 million into a Superhost Relief Fund for existing, highly-rated hosts who need assistance with rent or mortgage payments because of the devastating effects of the coronavirus.
Airbnb employees began the fund with a million dollars and according to the company, the two co-founders donated another $9 million.
Airbnb is also supporting financially losing hosts after travel arrangements have been canceled by tourists.
Airbnb said last week in response to travel bans and an increase in demands for cancellations that it was allocating $250 million to help cover the losses suffered by hosts.
Reuters reported in March that, owing to the coronavirus pandemic, the short-term home rental company held a telephone meeting with bankers to consider expanding an existing $1 billion debt facility despite a downturn in demand.
The organization will also contribute $5 million from the investment in Silver Lake and Sixth Street to a relief fund for hosts seeking financial assistance.
Airbnb is also planning to invest in its company for long-term stays that can last for several months and are aimed at students or workers on extended job assignments.
The U.S. firm revealed plans to list its shares last September and has not altered the position so far. Morgan Stanley has been Airbnb’s financial advisor on the contract.
