Airbnb, the home rentals site, announced on Thursday September 19th that it plans to go public in 2020, AP reported.
The company disclosed the news in a brief statement without giving a target date for the initial public offering or say why it thinks the timing is right. Airbnb, which is both loved and reviled for its disruption of the hotel business, was valued at $31 billion last year, according to Renaissance Capital, a research firm.
San Francisco-based Airbnb was launched in 2008. Co-founders Brian Chesky and Joe Gebbia needed some extra cash, so they put three air mattresses on their apartment floor and set up a website promising a place to sleep and a free breakfast. They named their new venture AirBed and Breakfast.
Since then, Airbnb has grown into one of the world's largest home-sharing platforms, rivalled only by Booking.com. Six guests check into an Airbnb every second, the company said. Airbnb has more than seven million listings in 100,000 cities worldwide.
Today, nearly 1,000 cities have more than 1,000 Airbnb listings compared to 12 in 2011.
Airbnb has said it was profitable on a pre-tax basis in 2018 and 2017, but it did not release specific numbers. The company said it made "substantially more than" $1 billion in revenue in the second quarter of this year, the second time in its history that quarterly revenue topped $1 billion.
Despite this, investors may be cautious after some recent initial public offering (IPO) flops. The ride-hailing companies Uber and Lyft debuted on the market earlier this year, but they continue to lose money, and both are trading well below their IPO prices. WeWork, which is also racking up losses of around $200,000 per hour as it opens shared office spaces, delayed its IPO earlier this week.
However, Kathleen Smith, a principal with Renaissance Capital, said the difference for Airbnb could be its profitability. Companies that are struggling in the markets have had trouble showing investors a path to profitability, she said. But the overall IPO market is performing well. The Renaissance Capital IPO investment fund is tracking 30% higher than the S&P 500 this year thanks to strong performers like Pinterest and Beyond Meat.
Airbnb has spent the last several years broadening its offerings in advance of an expected IPO. To attract guests put off by its couch-surfer reputation, it added boutique hotels and special designations for verified, high-quality properties. In 2017, it acquired Luxury Retreats to boost its high-end offerings.
But Airbnb has also faced a backlash in places like Amsterdam and Barcelona, where it has been accused of encouraging over-tourism and raising rents by taking living spaces off the market.
Stories about houses damaged by Airbnb guests or racist Airbnb hosts have also plagued the company. Late last year, the company stopped requiring guests to provide a photo before booking to prevent hosts from discriminating against them.