Airbnb raises $1b in debt, gets totally shafted

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Apr 7, 2020 149 Comments

Paying 11% to 12% interest, and giving the private equity firms option to purchase stock at $18B valuation.

When you need a ton of cash, private equity will hook you up...but it will absolutely be worth their while.

https://www.businessinsider.com/airbnb-paying-10-percent-interest-debt-valuation-cut-18-billion-2020-4

#airbnb

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TOP 149 Comments
  • Google / Eng
    sergeyblin

    Go to company page Google Eng

    sergeyblin
    Wtf do they need so much money for? It's basically just a CRUD website for god's sake, not a real estate trust
    Apr 8, 2020 34
    • Google
      VPpG31

      Go to company page Google

      VPpG31
      As someone who works at google and has made everything from crud apps to distributed web apps to desktop applications..... for the most part it’s all the same shit.

      The only thing that matters more with back end distributed systems is that things are less easy to change. But I bet even AirBnB has some reasonably complicated the game their “just a crud app” has millions of listings coming on and off the market and has an optimized search around that mostly likely built in a customized manner to show people the places THEY are most likely to book. Pricing algorithms to adjust prices based on demand and seller desired price points. Maintain chatting app functionality. Plus their UX concerns and such. It’s not a problem with no complicated issues to iterate on.

      I also bet they maintain some suite of internal tools to get sales and new places on the platform, managing customer support and such I’m sure they have some external tools they use but I would be unsurprised if there aren’t custom layers for that. I bet they’ve invested some money somewhere in machine learning to help figure out which photos are most likely to get a sale. Etc etc etc. highly specific search mean highly optimized.
      Apr 10, 2020
    • Uber
      fooliocity

      Go to company page Uber

      fooliocity
      Oh lord. When I worked at Amazon they threw a lot of shit against the wall too. Some of it was a fantastic success like Alexa, but most of that shit was a failure. Just the nature of the beast.
      Apr 17, 2020
  • New / Eng
    Psynaptic

    New Eng

    PRE
    Neuralink
    BIO
    Working on Brain Machine Interfaces
    Psynaptic
    Wtf... 12%? Is that normal? And how can I get in on that?
    Apr 8, 2020 9
  • Google
    arthurmorg

    Go to company page Google

    BIO
    is blind truly anonymous? I think not
    arthurmorg
    I don't even think they are worth 18b. What makes Airbnb the undisputable king in this space?
    Apr 8, 2020 12
  • Uber / Eng
    DgoQ22

    Go to company page Uber Eng

    DgoQ22
    Absolutely makes sense though. Would you be willing to lend money to Airbnb for only 11% interest with no further upside? Knowing there’s a non-zero chance they will go belly up?
    Apr 8, 2020 7
  • Google
    sthbwe

    Go to company page Google

    sthbwe
    It made me doubt if they truly have 3b cash in hand. Maybe they burned quite a lot already
    Apr 8, 2020 13
    • @seyp56, saying they should have gone early 2019 (not sure they had a window tho) They might have had an uber like one early 2020..(investing in future revenue growth blah blah but clearly, they didn;'t have a story) but now......they are royally shafted.

      Most $$ is made now pre and that leads to some bizarre C level decision making

      I
      Apr 9, 2020
    • Cost of revenue will go down (it’s variable) along with the .8B marketing cut they’re saving 1.5-2B over last years costs. It still doesn’t look great and they do need to lay-off, but if they do it sooner the pain will be smaller vs later.
      Apr 10, 2020