Public Markets Startups

Airbnb Nixes 2018 IPO, Details Financial Health

So much for at least one unicorn IPO this year. Airbnb will not go public in 2018, the company made clear today, also disclosing that its CFO will depart the firm. The company also announced the promotion of an internal denizen — Belinda Johnson — to the role of COO.

Previously, Airbnb was a 2018 IPO candidate, at least in the press’s imagination. Other unicorns like Dropbox and Spotify have privately filed to go public. While those flotations seem likely to occur this year, Airbnb won’t be adding its name to the mix.

The news that Airbnb CFO, Laurence Tosi, will leave comes just days after a report in The Information detailed what it described as “tensions” between the company’s CEO Brian Chesky and the now-departing financial executive. Differences noted included a disagreement concerning “launching an airline” versus working “with an existing flight-booking app.”

Now, however, that’s spilled milk under the bridge with the CFO gone and the IPO on hold. From its own post, here are the company’s key comments on the exit of its financial head:

Airbnb announced that Chief Financial Officer Laurence Tosi has decided to dedicate his full time and energy to his investment fund, Weston Capital Partners, and dedicate time to the several external boards he currently sits on and will be leaving Airbnb.

And, its new IPO timeline:

I know people will ask what these changes mean for a potential IPO. Let me address this directly. We are not going public in 2018. Our primary focus is becoming a 21st-century company and advancing our mission. We’re working on getting ready to go public and we will make decisions about going public on our own timetable.

That latter bit is usually hogwash, boilerplate slapped onto a market-forced IPO delay to make it appear more palatable. Airbnb, however, released a grip of numbers that should combat speculation that it’s simply not ready to go public.

Try this on for size:

Today, the company is one of the world’s fastest growing at our scale and is profitable, as measured by EBITDA, and cash flow positive with a $5.5B balance sheet and we continue to see material growth momentum in markets around the world.

That’s a lot of cash, and EBITDA profitability is more than enough to go public in today’s heady markets. So, the company’s isn’t going public, but probably not due to some sort of hairy bottom-line weakness.

Still, for the various groups hanging on to hopes that 2018 would finally see so much paper unicorn worth become real, this isn’t great news. Spotify’s IPO isn’t, it’s a direct listing. And Dropbox’s offering is still unclear from a timing perspective. Losing Airbnb from the potential mix means that quite a lot of value is going to stay illiquid. For now.

Illustration Credit: Li-Anne Dias


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