Airbnb is the latest startup to join the $1 billion club. It has just raised $112 million in a Series B round led by Andreessen Horowitz at a $1 billion plus valuation. It was earlier rumored that they were raising $100 million at a $1 billion valuation.
Airbnb had last raised $7.8 million in October 2010 in Series A funding from Greylock Partners and Sequoia Capital.
Jeff Jordan, a partner at Andreessen Horowitz posted an interesting story about their humble beginnings:
“Brian Chesky and Joe Gebbia met at the Rhode Island School of Design and became roommates in San Francisco in 2007. A prominent design conference was coming to town and the nearby hotels were sold out. Joe and Brian thought it might be both fun and lucrative to rent out space in their apartment to conference guests looking for lodging, but alas they lacked the requisite beds. Turns out that Joe had a few airbeds in the closet. They threw in a morning meal and airbedandbreakfastwas born. Three lucky conference attendees enjoyed good accommodations, food and hospitality while Joe and Brian enjoyed the company of their guests and some very welcome income.
Joe and Brian resolved to make a run at transforming this experience into a business. They were joined by a third co-founder, Nathan Blecharczyk, who brought programming expertise. The name was shortened to Airbnband they launched their website in 2009.
The Airbnb service quickly struck an extremely powerful chord with consumers. Growth has been flat-out explosive, with over two million room nights already booked. The site now features spaces in 186 countries and over 16,000 cities around the world. Hosts can earn substantial sums of moneyâ€”one has even used Airbnb earnings to pay off his mortgageâ€”and their community of users is passionate about the service, enjoying the social aspects of Airbnb travel.”
You can check out the official press release here: Airbnb Bags $112 Million In Series B.
Here’s another very inspiring anecdote about Airbnb by Mark Suster:
“The Airbnb founders came out of the winter 2009 Y Combinator class. They came to see us during their time at YC. They told us about a great stunt they pulled at the Democratic Convention in Denver (in which Obama was nominated). They bought a bulk supply of generic cheerios and made up these cereal boxes to generate seed capital for their startup. Here’s how one of the founders Joe Gebbia describes it:
We made 500 of each (Obama O’s and Cap’n McCains). They were a numbered edition on the top of each box, and sold for $40 each. The Obama O’s sold out, netting the funds we needed to keep Airbnb alive. The Cap’n McCains… they didn’t sell quite as well, and we ended up eating them to save money on food.
I asked them if they’d leave a box of the cereal for us and it has been sitting in our conference room ever since. Whenever someone tells me that they can’t figure out how to raise the first $25,000 they need to get their company started I stand up, walk over to the cereal box, and tell this story. It is a story of pure unadulterated hustle. And I love it”