Home-rental service Airbnb Inc. has completed one of the biggest
private-funding rounds ever, raising $1.5 billion, in a deal that
values the company at $25.5 billion, according to people familiar
with the matter.
Leading the round were private-equity firm General Atlantic
Inc., Hillhouse Capital Group of China and investment firm Tiger
Global Management, which are collectively buying about a third of
the shares allocated for the round, the people said.
The deal, on which Morgan Stanley served as adviser, included
Singapore's Temasek Holdings as well as venture-capital firms
Kleiner Perkins Caufield & Byers, GGV Capital, China Broadband
Capital and Horizon Ventures.
Also investing were several public "crossover" investment funds
that are taking stakes in private companies ahead of initial public
offerings. Mutual-fund firms Wellington Management and Baillie
Gifford bought in, while T. Rowe Price Group Inc. and Fidelity
Investments increased their stakes, the people said.
Some details of the deal were earlier reported by the Financial
Times.
Only three venture-backed companies have raised as much or more
equity funding in a single private placement, according to Dow
Jones VentureSource. Car-hailing service Uber Technologies Inc.
collected as much as $2.8 billion in a round this year, while
Chinese e-commerce giant Alibaba Group Holding Ltd. raised $1.6
billion in 2011. Facebook Inc., meanwhile, raised $1.5 billion
ahead of its IPO in 2011, including $1 billion worth of shares sold
directly to wealthy individuals outside the U.S.
At $25.5 billion, Airbnb's valuation would rank third on the
list of venture-capital backed startups valued at $1 billion or
higher, behind Chinese smartphone maker Xiaomi Corp. and Uber.
The Wall Street Journal reported last week that Airbnb's revenue
is expected to exceed $900 million this year, and then is projected
to reach $10 billion in 2020. The company recorded revenue of $250
million in 2013, people familiar with the matter have said.
Airbnb's website has more than 1.4 million listings of rooms,
apartments, houses and exotic locations for rent. The company makes
revenue by taking a 3% cut of each booking on its website, along
with a 6% to 12% service fee from guests.
With Morgan Stanley's involvement, the Airbnb deal is a landmark
for banks' push to advise on the giant private rounds that are
helping companies delay IPOs.
Morgan Stanley recently expanded its private-stock team, as have
other banks, in anticipation that more companies will raise capital
from many of the same institutions that buy into IPOs.
Several recent deals have used bankers, including Spotify AB's
$526 million offering via Goldman Sachs Group Inc., and Credit
Karma Inc.'s $175 million round via Goldman and J.P. Morgan Chase
& Co.
Douglas MacMillan contributed to this article.
Write to Telis Demos at telis.demos@wsj.com
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