As Airbnb prepares for its big leap into public markets, it is expanding its accommodation platform to include more than treehouses and quirky homes.
Today, the company confirmed its intention to acquire HotelTonight, the developer of a hotel reservation app that allows travelers to arrange last-minute accommodations. The deal was previously reported by The Wall Street Journal, which wrote in January that negotiations for the deal were “cold.”
Airbnb is expected to complete an initial public offering as early as this year, although co-founder and CEO Brian Chesky has refrained from revealing a specific timeline. Like Uber, which plans to become the premier transportation company, Airbnb’s long-term ambition is to create an end-to-end travel platform that includes home sharing, travel reservations. hotel, organization of business trips, experiences, etc.
Airbnb has refused to disclose the terms of its acquisition of HotelTonight. Once the transaction is concluded, the The HotelTonight app and website will continue to operate on an independent basis, with co-founder and CEO Sam Shank reporting to Airbnb President of Homes, Greg Greeley.
“We started HotelTonight because we knew people wanted a better way to book a hotel room on demand, and we’re excited to partner with Airbnb to bring this service to customers around the world,” said Shank in a press release. “Together, HotelTonight and Airbnb can give customers more choice and the world’s best boutique and independent hotels a true partner in connecting them with those customers.”
Founded in 2010, San Francisco-based HotelTonight earned a valuation of $ 463 million with Series E funding of $ 37 million in 2017, according to PitchBook. In total, the startup has raised $ 131 million in venture capital from Accel and Battery Ventures, which have been involved in nearly every round of funding for HotelTonight. Other early investors include Forerunner Ventures and First Round Capital.
Airbnb, for its part, was valued at $ 31 billion in 2017, with a round of $ 1 billion. In January, Airbnb said it was profitable for the second year in a row based on EBITDA (earnings before interest, taxes, depreciation and amortization).
HotelTonight offers discounts at hotels in the Americas, Europe and Australia. The company partners with hotels to offer unsold rooms, for business travelers or those looking to make last-minute arrangements. The deal will make it easier for Airbnb users to book hotels without planning weeks or months in advance and will help Airbnb expand its community beyond short-term rental hosts and guests.
Airbnb introduced boutique hotels to its platform in early 2018 and boasted of its rapid growth. In 2018, the company said it more than doubled the number of boutique hotels, guesthouses, inns and resorts available. Airbnb’s business travel unit, Airbnb for Work, has also seen rapid success. Launched in 2014, it now represents 15% of reservations. In total, Airbnb offers some 5 million homes in 191 countries.
Airbnb kicks off 2019 with a sequence of acquisitions. In January, the company acquired Danish startup Gaest, a provider of a marketplace-like platform for users to post and reserve venues for meetings and other work-related events. The company again declined to specify the price, although Gaest only raised $ 3.5 million in equity, the deal is paltry compared to acquiring Airbnb HotelTonight.
2019 is shaping up to be a particularly busy year for unicorn IPOs, some of which were likely delayed by a weeks-long government shutdown at the start of the year. Lyft, which recently unveiled its S-1, is set to be the first billionaire company to exit the stock market, followed by Uber, Slack and Pinterest. Will Airbnb find its way into this range? We will see.