SAN FRANCISCO — Airbnb, the home rental service that disrupted the travel industry and was itself disrupted by the coronavirus, took a major step toward one of the year’s largest initial public offerings when it revealed declining revenue and growing losses in a prospectus on Monday.
The offering, which could value Airbnb at more than $30 billion and raise as much as $3 billion, will test investors’ appetite for hospitality-related stocks in a year when the industry has been battered and its future is uncertain. The company provides a marketplace for people to rent their homes, taking a percentage of the fees, and facilitates bookings for activities.
Airbnb’s prospectus painted an optimistic picture, advertising its brand’s association with unique travel experiences. “We have helped millions of people satisfy a fundamental human need for connection,” the company said. “And it is through this connection that people can experience a greater sense of belonging.”
In total, Airbnb brought in $2.5 billion in revenue in the first nine months of the year, down from $3.7 billion a year earlier. Its net loss more than doubled during that period to $697 million. The company’s shrinking revenue means it cannot pitch Wall Street on the typical tech start-up narrative of soaring growth. It was the first time Airbnb provided a comprehensive look at its finances.
Airbnb was valued at $31 billion before the pandemic, but some investors bought shares valuing it at $18 billion after travel ground to a halt.
Airbnb follows a string of highly valued start-ups to the public market this year. Listing shares in recent months, to mixed reviews, were Palantir, a data company valued at $20 billion; Unity Technologies, a gaming software business worth $6.2 billion; Snowflake, a data storage start-up worth $12.4 billion; and Asana, a collaboration technology provider valued at $1.5 billion. On Friday, the delivery start-up DoorDash also revealed its finances in preparation for going public.
This is a developing story. Check back for updates.