Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
With a tough year for business, Airbnb makes an ambitious move of public listing as the company is working on restructuring its business model and streamline operations.
On Monday, November 16, online-rental marketplace Airbnb submitted its IPO filing. Despite taking a severe revenue hit during the COVID-19 pandemic, the company is willing to go public. Airbnb plans to list its share on the Nasdaq Global Select Market with the ticker symbol ABNB. As per the Reuters report, the company is likely to raise $3 billion which would value the company at $30 billion. Interestingly, in the IPO application submitted to the US SEC, Airbnb speaks about leveraging future technologies like blockchain and crypto.
The IPO prospectus also states that the company’s “future success will … depend on our ability to adapt to emerging technologies such as tokenization, cryptocurrencies [and] new authentication technologies.”
Well, it will be really interesting to see Airbnb accepting crypto payments for the stay bookings. Moreover, it is even more likely considering giants like PayPal have jumped into this game. Apart from distributed ledger and blockchain, Airbnb cites other new technologies as well. This includes artificial intelligence, biometrics, cloud technologies, virtual and augmented reality, etc.
But the prospectus clearly mentions other “Risk Factors” that come along with such transformation plans. “As a result, we intend to continue to spend significant resources maintaining, developing, and enhancing our technologies and platform. However, these efforts may be more costly than expected and may not be successful,” reads the IPO prospectus.
Airbnb Sailing Through the Pandemic Times
With global travel coming to an absolute halt and cities under lockdown, Airbnb faced a major jolt to its business. The San Francisco-based company reportedly lost more money in the first nine months this year than in the entire 2019. Overall, the gross bookings are down by 40% and revenue declined by 30% year-over-year.
However, Airbnb’s deep cost-cutting and resilient business model helped the company sail through. During the third-quarter, Airbnb reported net revenue of $1.34 billion with a profit of $219 million. “The recovery in the second and third quarters of 2020 is attributable to the renewed ability and willingness for guests to travel, the resilience of our hosts, and the relative strength of our business model,” the company said.
But with the second wave of COVID-19 striking across many parts of the world, the future remains uncertain. “Similar to the impact of the initial COVID-19 wave in March 2020, we are seeing a decrease in bookings in the most affected regions”, Airbnb said in its IPO prospectus. The company has properties listed in more than 180 countries around the world.