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Is Airbnb Preparing for an IPO?

As I’ve mentioned in previous blogs, the tech market is hot right now. Airbnb is another company on the potential IPO watch list. The company enables people to rent out their home, apartment, or boat -- or even just a room in their house -- to travelers. Airbnb is valued at nearly $10 billion and the recent round of private equity financing being led by TPG Capital gets them closer to an IPO in terms of public perception.

It is likely that the private equity firm’s reporting requirements will be similar to public filings in terms of quarterly reporting, board of directors meetings and the like.   Therefore, taking the next step and filing for a public offering, which some predict could be sometime this year, may be a smoother transition.
 
The rise of the ‘share economy,’ which Airbnb is betting will continue in popularity, could be an indicator of the future success of the six–year-old company.  An IPO could be successful if regulators do not force similar standards that hotels are held to.  If they do, then Airbnb may not be an attractive alternative to hotels, and their appeal to stock market investors might change as well. 

What I find most noteworthy about the Airbnb story is the very high valuation for a company that is a ‘match maker’ of sorts. Many are questioning if the tech market is in a bubble that could burst, but for now, it’s no wonder why business owners are choosing to take advantage of a ripe market.  

Marc Fogarty, Audit Partner and a member of EisnerAmper's Public Companies, Cleantech and International Services Groups. Marc is experienced in public accounting, serving public and private organizations and has presented on IFRS to professional groups.

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