AirBnB’s Imminent Identity Shift May Lead to a M&A Shopping Spree

Airbnb

Wherever there is smoke there is fire. And with AirBnB the identity shift of the company from P2P urban rental platform to a full-blown 360° travel service provider seems imminent. Prior to its IPO, not incidental.

According to Bloomberg, AirBnB has still $3 billion sitting in the bank waiting to get used for acquisitions:

On Thursday, Bloomberg reported that Airbnb’s board met to approve the purchase of Luxury Retreats, a vacation-home management company in Montreal. The sale is expected to garner no more than $300 million in cash and stock. Airbnb is also in the process of purchasing the group-payments company Tilt. Airbnb declined to comment on the deals because they are not yet public. […]

Airbnb became profitable in the second half of 2016, when revenue at the company increased more than 80 percent that year, Bloomberg reported. Airbnb expects to remain profitable in 2017. Since launching in 2008, the home- and apartment-rental company has raised $3.1 billion in capital, and still has nearly all its funding, three investors said. The investors asked not to be identified because they have signed non-disclosure agreements. […]

The trip planner, it said, would give users personalized travel suggestions based on their location and past behaviors. In order to deliver on the ambitious project, two of the people said, Airbnb is looking to partner with or acquire a travel search engine similar to competitor Priceline Group Inc.’s Kayak.com.

“Airbnb has dominated in the urban-rental market but still has lots of room to grow in vacation rental markets, where Expedia’s HomeAway is stronger and the average transaction value is significantly higher,” said Douglas Quinby, an analyst at the travel industry research firm Phocuswright. Quinby, who expects Airbnb will pursue its initial public offering over the next 12 to 24 months, said Airbnb will need to use that time to drive growth in new product categories, such as vacation rentals and business travel, as well as new geographies, to justify its private market valuation of $31 billion.

​Think of future AirBnB as a vertically integrated travel search engine that has data to draw from that no one else has. Also: a company that has access to users that is unique in its kind to the industry. The coming IPO will push AirBnB further. Which makes the next 12 to 24 months especially interesting.

Also, remember the three rules on how to expand marketplaces successfully: AirBnB’s P2P platform is a marketplace for rentals. Expanding means hardwired connections to this first platform. Also, expect AirBnB to try bringing marketplace/platform/matchmaking services to whatever segment of the travel industry they expand into.

It is in AirBnB’s DNA and it is business wise sound.

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2 comments

  1. […] Flight searches going through the roof, Ctrip attacking the travel duopoly from China and AirBnB going through an identity shift while it is building a flight search engine and other new offerings, things are about to get […]

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  2. […] AirBnB’s Imminent Identity Shift May Lead to a M&A Shopping Spree […]

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