The idea of welcoming a couple of strangers into your home is scary. And so it letting yourself stay in a strange home is. But almost a decade ago, some brilliant minds saw an entrepreneurial opportunity in this and launched Airbnb. These brilliant minds are none other than Brian Joseph Chesky, Joseph Gebbia, and Nathan Blecharczyk who launched Airbnb in 2008.
- Company Name-Airbnb
- Headquarter-San Francisco
- Sector-Hospitality, Travel Accomodation
- CEO-Brian Joseph Chesky
Airbnb - About and How it works
Airbnb is nothing but an accommodation marketplace that provides access to over 6 million unique places to stay comfortably and at their leisure in nearly 100,000 cities and 191 countries. Interestingly, Airbnb also offers access to local communities and interests through more than 30,000 activities run by hosts across over 1,000 markets around the world so that you can be a traveler and not just a tourist. It entered India in 2016. Since its inception in India, the company has around 45,000 listings with Goa being it’s a most popular network with 6000 listings.
So all in all, one can safely say that Airbnb is an online marketplace that connects locals who want to rent out their house to immigrants who are looking for accommodations in the local area.
Airbnb - USP and Innovation
There are quite a few unique selling factors of Airbnb including a combination of factors, but the highlights are primarily the financial ones.
The guests who come through Airbnb get good value accommodation with a wide array of price points that the user can choose from. This ranges from a few pounds a night to hundreds and thousands with often such prime locations where a hotel would cost infinitely more than Airbnb accommodations.
Airbnb hosts can cash in more on spare space that they have available in their homes. So it’s a win-win for the guests and the hosts and also for the platform, Airbnb.
Airbnb - Founders and Team
Brian Joseph Chesky, CEO - Brian is a very known American technology entrepreneur and also the co-founder and CEO of Airbnb. Chesky was named one of Time's "100 Most Influential People of 2015". Chesky attended the Rhode Island School of Design and received his Bachelor of Fine Arts in Industrial Design. Post that, Chesky worked as an industrial designer and strategist at 3DID, Inc. in Los Angeles. And then he went on to co-found Airbnb with his fellow co-founders.
Joseph Gebbia, CPO - Joseph is one of the finest designers and Internet entrepreneurs around the globe. Joseph has quite a few recognitions on board like he was listed in BusinessWeek's Top 20 Best Young Tech Entrepreneurs in the year 2009, followed by being named in Inc. Magazine's Thirty Under Thirty in 2010, and in 2013, he was named in Fortune Magazine's Forty-under-Forty.
Nathan Blecharczyk - Nate is an American billionaire businessman. He is the co-founder and chief strategy officer of Airbnb. Also, he is the chairman of Airbnb China. Nate is a Harvard Graduate and was working as an engineer at OPNET Technologies before co-founding Airbnb.
Airbnb - How did it start?
In case you're wondering how Airbnb actually started? This is how it did. The Airbnb story is full of determination and adventure. All of it started in 2007 when Airbnb founders Brian Chesky and Joe Gebbia had just moved from New York. They were legit surviving without employment and were having serious trouble paying their rents. So to overcome this situation, they were looking for a way to earn some extra cash. And it’s during this time that the co-founders noticed that all hotel rooms in the city were booked because there were a lot of visitors coming to the local Industrial Design conference.
The young and talented minds saw an opportunity here and following that, they bought a few airbeds and quickly curated and put up a site called “Air Bed and Breakfast.” Their idea was quite basic and it was all about offering visitors a place to sleep and a lush breakfast in the morning. This freshly turned entrepreneur duo charged $80 to the visitors for each night.
And it quite turned out that their idea succeeded and the first Airbnb guests were born. And they were a 30-year-old Indian man, a 35-year-old woman from Boston and a 45-year-old father from Utah sleeping on their floor. And that’s how Airbnb was born.
Airbnb - Startup Launch
Airbnb started in 2008. But it came to India almost after 8 years of its inception, i.e., in 2016. Soon after Airbnb’s launch in India, it announced a strategic partnership with India’s largest media conglomerate, The Times Group. This association was done in order to expand Airbnb’s operations in the country and build a more channeled and a localized network. It had just been a year after this collaboration that Airbnb launched a travel category called Trips. This was initially available in Delhi and then later expanded to Goa.
In June 108, Airbnb launched ‘Experiences’ in its ‘Trips’ category to offer its travelers the chance to explore unique destinations by providing them with handcrafted activities powered by locals.
“We have offered Experiences in New Delhi and Goa and the product is doing quite well. It grew over sixfold last year, and will continue to grow at a very fast rate,” said Nate.
Airbnb - Business Model and Revenue Model
This is how the business model of Airbnb works. Airbnb is an online marketplace, which lets its users rent out their properties or spare rooms to guests. In this process, Airbnb takes 3% commission of every booking from the hosts, and between 6% to 12% from the guests.
Airbnb offers a plethora of criteria to list for or search property in a particular destination. These criteria range from locating or renting a shared room to a complete house, to having a lavish swimming pool to having basics like TV and washing machines. There are pictures of the property listed on the site, and both the hosts and the guests get a full map listing.
Airbnb - Competitors
Though the concept is new and recently gained all its popularity, Airbnb still faces tough competition in India. Its main rival in terms of market standing in the country is a homegrown hospital chain namely, Oyo Hotels and Homes. Though both are different in how they run and operate, they still cross paths as both of their end customers are the same. Oyo mainly operates as a full-stack fulfillment-led model where it normally acquires the entire hotels and homes on a franchise-based or leasing model and then goes on to renovate the same. Whereas on the other hand, Airbnb focuses majorly on the homestay accommodations.
Airbnb - Funding and Investors
Airbnb has received an all-round of $4.4 billion in funding over the years and currently is being valued at $35 billion.
In January 2009, in just one year of its inception, Airbnb received $20,000 in venture funding from Y Combinator.
The next funding round came in April 2009, when Airbnb raised $600,000 from Sequoia Capital, with renowned participants like Youniversity Ventures partners Jawed Karim, Keith Rabois, and Kevin Hartz.
This was followed by funding round in November 2010, where the company raised $7.2 million in Series A funding led by Greylock Partners and Sequoia Capital.
Then came the mega funding year, July 2011, when the company went on to raise $112 million in financing round which was led by Andreessen Horowitz. Other investors who participated in this funding round were Digital Sky Technologies, General Catalyst Partners, and A-Grade Investments partners Ashton Kutcher and Guy Oseary.
In April 2014, Airbnb again closed an investment of $450 million by TPG Capital. Right around the same time, it acquired additional funding by Andreessen Horowitz, Sequoia Capital, Dragoneer Investment Group, T. Rowe Price and Sherpa Capital.
Then came the June 2015 funding, when Airbnb raised $1.5 billion in Series E funding. This round was led by General Atlantic, and there was also some huge participation from Hillhouse Capital Group, Tiger Management, Kleiner Perkins Caufield & Byers, GGV Capital, China Broadband Capital, and Horizons Ventures.
In September 2016, the company raised a grand amount of $555.5 million in a funding round led by Google Capital and Technology Crossover Ventures.
And then again a year later, in March 2017, the company raised $1 billion in funding, which brought its total funding to more than $3 billion and at this point in time Airbnb was valued at $31 billion.
It’s latest funding round happened in September 2018, where it came to raise $25.92 million from two undisclosed investors.
Airbnb - Growth
Airbnb India hosts collectively earned more than to $28 million (over Rs 190 crore) till date
The Indian hosts have welcomed more than 800,000 guests
Guests in India, through Airbnb, spent $61 daily, on an average
Airbnb has seen a steady rise in popularity in India over the years and the number of listings is increasing at an increasing rate of 150%
Airbnb’s business in India has doubled over the years
On average, 1.8 million Indian have used Airbnb in its 4 years of operations in India
Airbnb India recently signed a strategic partnership with its main competitor, OYO Rooms. One of the prospects of this association include listing OYO’s properties on Airbnb
Airbnb recently introduced ‘Plus Homes’ in India, where the company is featuring homes with high ratings.
Globally, Airbnb has over 2 million listings
And is currently active in over 190 countries and 34,000 cities.
Airbnb hosts, throughout the world, have hosted over 40 million guests.
The company is worth an estimated 35 billion
Airbnb - FAQs
What is Airbnb?
Airbnb is an online marketplace that connects locals who want to rent out their house to immigrants who are looking for accommodations in the local area.
How does Airbnb work?
Booking is made through Airbnb where the traveller pays the amount mentioned by the host and some additional money as transaction charges. The host approves the booking. Traveller stays there and finally, Airbnb pays the amount to the host after deducting their commission.
Who are the competitors of Airbnb?
Airbnb competitors in India:-
What are the rules for an Airbnb?
Some common house rules examples that many Airbnb hosts include in their listing pages:
- No loud noise after 11 pm
- No food or drinks in bedrooms
- No parties or events
- No smoking
- No pets / Pets allowed