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Airbnb To Show Full-Year Profitability For 2017, Signals IPO Readiness

On Thursday afternoon, amid news of Intel’s record-breaking earnings from Q4, suggestions that the once-public now-private Dell may indeed go public once again, and various happenings in the cryptocurrency trading space, a report from ReCode seemed to fly under the radar.

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Kara Swisher reported that Airbnb, the home rental and travel behemoth, will “show $100 million in cash-flow profitability for the full year in 2017.” The company is also adding Kenneth Chenault, the former CEO of American Express, to its board.

These new developments are interesting for a couple of reasons. First, it places Airbnb in a small and rarified club of private, billion-dollar-plus companies that also manage to consistently turn a profit.

Most importantly, the ability to consistently turn a profit—plus the addition of a respected public-company executive to its board—signals growing readiness for Airbnb to go public.

Since its first round of funding – a $20,000 check from Y Combinator in January 2009 – through the present day, Airbnb has raised a total of about $4.4 billion. That’s split between $3.4 billion in venture funding from the likes of Andreessen Horowitz, Sequoia, General Catalyst, Kleiner Perkins, and many others, plus $1 billion in debt financing led by JP Morgan Chase.

With Uber CEO Dara Khosrowshahi punting his company’s IPO to 2019, Airbnb—valued at $31 billion in its last funding round—stands head and shoulders (or, rather, at least $10-20 billion in private market valuation) above the likes of now-profitable Palantir, WeWork, Pinterest, Lyft, Dropbox, and other US-based companies on the unicorn leaderboard.

In some ways, this isn’t new news. According to reporting from CNBC from March 2017, co-founder and CEO Brian Chesky told members of the Economic Club of New York that “[Airbnb is] probably about halfway through [the] project” of readying itself for an IPO, a process he said would take two years.

So, working backward, 2018 would be the year when all the IPO prep would come to a head. And if Airbnb does go public this year, it could be the largest private U.S.-based tech company to do so in 2018.

All this being said, the company is still experiencing some growing pains and internal turf battles. According to an exclusive report published by The Information this past Tuesday, Airbnb’s CFO Laurence Tosi finds himself at loggerheads with CEO Brian Chesky. Chesky has reportedly advocated for expanding the scope of Airbnb’s offerings to become a more diversified travel firm. This reportedly included exploring the possibility of launching an airline (which, given the airline business, doesn’t seem like a great move these days). Tosi, for his part, has encouraged financial discipline and strategic restraint, according to the report.

Airbnb has indeed diversified beyond just the home-rental business, but that’s still the mainstay for company revenue. There are still a number of unanswered questions concerning regulation, long-term growth prospects, and whether or not the company will continue diversifying its service offerings.

But one thing is for sure: Airbnb has come a long way from a couple of dudes with some airbeds and breakfast for travelers.

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