Airbnb, which lets users list their homes and apartments for short-term rentals, is in talks to raise $1 billion in venture capital, according to a person close to the discussions. The financing round would value Airbnb at $24 billion, said the person, who spoke on condition of anonymity.
If the financing closes, Airbnb will more than double its valuation of $10 billion from just over a year ago. The company has garnered nearly $800 million in funding to date from investors including Sequoia Capital and Andreessen Horowitz.
Airbnb’s funding talks, which were earlier reported by The Wall Street Journal, are another example of the fast growth and interest in so-called on-demand start-ups, many of which are seeking hundreds of millions of dollars and ever-climbing valuations in their quests to upend existing industries.
Airbnb is using its riches to take on hospitality giants like Marriott andHilton Worldwide. Companies like Uber and Lyft, which have created ride-hailing smartphone applications, are fighting long-entrenched incumbents in the taxi and limousine industry. Uber has raised several billion dollars in just the last year and has been in talks to raise about $1.5 billion at a $50 billion valuation.
Airbnb is projecting approximately $900 million in revenue over 2015, according to the person close to the company.
Airbnb has faced regulatory and insurance hurdles on a state-by-state basis, while simultaneously battling hotel companies that see the young company as a growing threat. Last year, the office of Eric T. Schneiderman, New York’s attorney general, released a report saying that nearly three-quarters of Airbnb rentals in the state were illegal and violated zoning or other laws.
Airbnb, which was established in 2008, now has hosts offering their homes for rent in more than 34,000 cities and 190 countries around the world, according to the company. It says more than 25 million people have signed up to use its service.