Airbnb is reported to be looking to raise $3bn through its IPO, giving it a valuation of $30bn.
The group is expected to wait until after the US election to come to the market, with the date also subject to change depending on potential travel restrictions.
The platform is likely to make its filing - so far secret - publicly available in November. Prior to the pandemic Airbnb had planned to IPO this year, with a direct listing mooted, which would have allowed its investors to exit, but without raising additional cash.
While the market waits, Airbnb has been preparing itself by addressing its relationship with different jurisdictions after the European Court of Justice upheld France's law requiring municipal authorisation for short-term property rentals.
Airbnb has, in response, launched its City Portal solution, which it said was built for governments and tourism organisations to help foster “a deeper partnership with Airbnb”.
In French cities with more than 200,000 inhabitants, owners who wish to rent their residence for more than 120 days per year must first ask for an authorisation to be granted by the mayor of the municipality.
The ECJ said that the "proportionate" legislation was "intended to establish a mechanism for combating the long-term rental housing shortage, the objective of which is to deal with the worsening conditions for access to housing and the exacerbation of tensions on the property markets”.
Paris Mayor Anne Hidalgo said: ”This victory, awaited by many cities, marks a turning point for the supervision of seasonal rentals and constitutes a step forward for the right to housing for all.”
Airbnb’s City Portal will include local and global Airbnb data insights into short-term rental market characteristics and remitted tourist tax revenue in places where tax agreements have been established. It will also offer access to an Airbnb team member, providing one-to-one support with City Portal or issues that arise locally.
Brian Chesky, CEO & co-founder, Airbnb, said: “We created this tool with cities and our goal is to ensure it works for big cities and small towns, and is adaptive to different needs. The way we live and travel continues to change, with people dispersing to more places. The Airbnb City Portal will make it easier for cities of all sizes to work with us and benefit from our community.”
In addition, a group representing 45 housing associations has written to the chairman of the SEC questioning Airbnb’s IPO disclosures.
The group, describing itself as a global coalition, led by Fairbnb Canada and ShareBetter SF, said that many of Airbnb’s public descriptions of its business model, practices, and operations were at odds with independent analysts and “often at odds with reality”.
The group said that there were a number of issues that were important for potential investors to understand, calling on the SEC to address them.
Issues named by the group included disclosure of risks, citing moves by jurisdictions around the world to limit short-term rentals.
In September Airbnb was thought to have knocked back an offer to merge with Bill Ackman’s Pershing Square Tontine Holdings.
Ackman raised $4bn in an IPO in July and told investors last week that he was in talks with a number of potential companies, one of whom was thought to be Airbnb.
“We would certainly take a look at a company like Airbnb. I’ve always admired the business,” Ackman said in an interview with Bloomberg TV in July. “I’ve admired its economic characteristics.”
In April Airbnb raised $2bn, with a $1bn syndicated term loan from institutional investors adding to $1bn it raised from Silver Lake and Sixth Street Partners.
Airbnb co-founder Brian Chesky said that the money meant rather than, rather that “merely hunkering down”, the company would “continue moving forward”.
It was thought that private equity firms Silver Lake, Apollo Global Management, Sixth Street Partners, Oaktree Capital Management and Owl Rock participated, with the loan priced at an interest rate of 750 basis points over the Libor benchmark.
Chesky said: “We know travel will return and rather than merely hunkering down, the support we have received will allow Airbnb to continue moving forward as we invest in our community. All of the actions we have taken assure that Airbnb will emerge from the storm of the pandemic even stronger, regardless of how long the storm lasts.”
Insight: Airbnb is looking to return to its big-valued days pre-pandemic - not that it’s a midget now - and take its crown as the ultimate unicorn. But what form will this mythical beast take? At this point potential investors must decide for themselves what they think it is, lacking as they are in detail.
Is it a short-term let platform? Is it a challenger to hotels? Does it provide long-term accommodation, as it said it would earlier this year? At the moment it has turned, sunflower-like, to the brightest source of business; people wanting holidays where they can effectively self isolate.
At this time following the money is the only way to go, but if you’re investing, it would be nice to know what the plan is. Will we find out once we know who the next incumbent is of the White House? It could be a November of surprises.