Airbnb is listening to investment pitches despite large cash

Airbnb is fielding “significant” interest from investors even as the coronavirus crisis hits the travel and hospitality industry especially hard, two sources familiar with the matter told CNBC.

Airbnb is in “listen mode” as it considers raising money during what it believes could be a good opportunity, one of the sources said. Another source said the company is in a position to weather the outbreak, but is in discussions to raise. The amount of a new funding round and a new valuation for Airbnb are still being discussed.

Airbnb declined to comment.

Airbnb already has plenty of funds with $3 billion in cash and $1 billion in credit, CNBC is told. The company has raised a total of $4.4 billion so far, according to Pitchbook. The company has seen interest from venture capitalists, private equity firms and sovereign wealth funds, according to the sources.

Early Airbnb investor Ron Conway confirmed to CNBC that he’s been referring calls to the company, including from several large and sophisticated investors.

“Those investors are calling me saying, I hope Airbnb is raising right now because if they are, I want a seat at the table,” Conway told CNBC. “A lot of them are ones that went through the dotcom crash with me back in 1999 and 2000. The’yre the same people who were very wise and invested in companies like Google, Amazon and Apple. They’re saying, coming out of this downturn, it’s going to be companies like Airbnb that will be huge huge market performers.”

Conway said he didn’t know what valuation the offers would be looking at or whether Airbnb will accept a new round of funds, though he said the extra cash could be used to help it out of the downturn. Conway said Airbnb is more “nimble” than other travel companies like Expedia and Booking and will be able to “weather the storm.”

“I would highly expect that they would use some very good market technique to gain market share coming out of this,” Conway said. “Their growth rate was already much higher than their competitors. Now, everyone in the travel industry is reeling but Airbnb, with that management team, will be much more nimble coming out of this trauma.”

A fundraising round for Airbnb would buck the trend of VC deals simmering down as the markets plunge on coronavirus fears. Investors told CNBC they predict fundraising rounds generally stalling and reaching less eye-popping valuations. One source said about a dozen “high quality private companies” are fielding interest from investors despite the turmoil in public markets.

It’s still unclear how a fundraising round could impact the company’s plans to go public. Airbnb had said it planned to debut this year but the economic shift resulting from the COVID-19 pandemic has thrown that possibility in question again. CEO Brian Chesky told CNBC’s Jim Cramer last year that the company was not in a rush to go public because “We don’t need to raise money.” Employees at Airbnb had put pressure on the company to go public as their valuable stock options are set to start expiring toward the end of the year, The New York Times previously reported.

For the same reason, Airbnb could choose to pursue a direct listing over an initial public offering, meaning it would not need to sell new shares to public market investors. The company has not yet made a decision about an IPO or direct listing, according to one of the sources familiar with the situation. Morgan Stanley and Goldman Sachs are lead underwriters for the company.

-CNBC’s Laura Batchelor contributed to this report.

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