Private equity firms invest $1 billion in Airbnb capital.
In response to the global impact of the COVID-19 pandemic, Airbnb has announced a series of measures aimed at supporting its hosts, long-term stays, and Airbnb experiences.
The company, which has seen a significant drop in bookings due to the pandemic, has raised $1 billion in debt and equity from Silver Lake and Sixth Street Partners. This funding will be directed towards three core areas, as announced by Airbnb's co-CEO, Egon Durban.
Airbnb is committed to helping hosts affected by the pandemic. Under the new initiative, the company will pay hosts 25% of what they would normally receive through their cancellation policy for cancellations due to COVID-19 between March 14 and May 31. This policy change is intended to make amends and appease hosts who have been complaining about earlier policies that allowed guests to cancel and receive full refunds.
Last month, Airbnb announced that it would be directing $250 million to help hosts impacted by COVID-19. The terms of the deal were not disclosed, but the funding is expected to support Airbnb's ongoing work to invest in the long term.
Brian Chesky, CEO of Airbnb, mentioned that the desire to connect and travel has been reinforced during this time, and its manifestation will evolve as the world changes. He also emphasised that the funds would not be a bailout, but a strategic move to ensure the company's resilience and prosperity as the world recovers from the pandemic.
The pandemic has prompted governments worldwide to encourage people to stay at home, causing a wave of cancellations in the travel and hospitality industries. Despite the challenges, Durban believes that Airbnb's diverse, global, and resilient business model is well suited to prosper in these times.
However, it's unclear how this funding might affect Airbnb's plans to go public. The available search results do not provide information about which investment banks engaged with Airbnb before the COVID-19 pandemic to participate in the platform in the future.
As the world navigates the challenges posed by the COVID-19 pandemic, Airbnb's initiative serves as a testament to the company's commitment to supporting its hosts and the travel industry at large.
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