Airbnb Raises $1 Billion to Stockpile Cash in Pandemic

SAN FRANCISCO — Airbnb said on Monday that it had raised $1 billion in new funding as it grapples with devastation from the coronavirus pandemic, and as some technology start-ups take extra measures to stockpile cash during the outbreak.

The private equity giant Silver Lake and the investment firm Sixth Street Partners led the investment, which was a mixture of equity and debt. Airbnb, a home rental start-up that was previously valued at as much as $31 billion, also lowered its internal valuation to $26 billion last month, according to a person with knowledge of the situation who declined to be identified because the information was confidential.

“The new resources will support Airbnb’s ongoing work to invest over the long term in its community of hosts who share their homes and experiences,” the company said in a statement.

Airbnb’s business has been hobbled during a shutdown in global travel caused by the spread of the coronavirus. It is a delicate time for the company, one of the largest and most prominent start-ups to emerge from Silicon Valley in the last decade. Airbnb had said that it plans to go public this year. But that may be in limbo because of stock market volatility and uncertainty caused by the virus.

On March 30, Brian Chesky, Airbnb’s chief executive, held a video call with the company’s hosts and said the past few weeks had been a “wake-up call.” He announced a $250 million fund to compensate hosts for a portion of their booking cancellations, as well as a $10 million pool of grant money for its “Superhosts,” paid for by Airbnb’s founders and employees.

“I’m sorry we didn’t consult you as partners,” Mr. Chesky said on the call.

In its funding announcement, Airbnb said it would now focus on travel that’s closer to home and long-term stays, including students and people on extended work assignments.

“The desire to connect and travel is an enduring human truth that’s only been reinforced during our time apart,” Mr. Chesky said in a statement on Monday. He added that, practically speaking, the way we connect and travel “will evolve as the world changes.”

Last month, Airbnb began fielding new and unsolicited funding offers from venture capital firms, private equity firms and sovereign wealth funds, a person familiar with the situation said at the time. Offers ranged from $100 million to $1 billion, the person said.

Private equity firms like Silver Lake are sitting on large reserves of cash. Many of the firms said they saw investment opportunity as American businesses struggle.

In a statement, Egon Durban, co-chief executive of Silver Lake, said Airbnb was well positioned to thrive when the world recovers from the virus.

“While the current environment is clearly a difficult one for the hospitality industry, the desire to travel and have authentic experiences is fundamental and enduring,” he said.

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