INSUBCONTINENT EXCLUSIVE:
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.It’s finally 2020,
the year that should bring us a direct listing from home-sharing giant Airbnb, a technology company valued at tens of billions of dollars
The company’s flotation will be a key event in this coming year’s technology exit market
Expect the NYSE and Nasdaq to compete for the listing, bankers to queue to take part, and endless media coverage.Given that that’s ahead,
we’re going to take periodic looks at Airbnb as we tick closer to its eventual public market debut
And that means that this morning we’re looking back through time to see how fast the company has grown by using a quirky data point.Airbnb
releases a regular tally of its expected “guest stays” for New Year’s Eve each year, including 2019
We can therefore look back in time, tracking how quickly (or not) Airbnb’s New Year Eve guest tally has risen
This exercise will provide a loose, but fun proxy for the company’s growth as a whole.Before we look into the figures themselves, keep in
mind that we are looking at a guest figure which is at best a proxy for revenue
We don’t know the revenue mix of the guest stays, for example, meaning that Airbnb could have seen a 10% drop in per-guest revenue this
New Year’s Eve — even with more guest stays — and we’d have no idea.So, the cliche about grains of salt and taking, please.But as
more guests tends to mean more rentals which points towards more revenue, the New Year’s Eve figures are useful as we work to understand
how quickly Airbnb is growing now compared to how fast it grew in the past
The faster the company is expanding today, the more it’s worth
And given recent news that the company has ditched profitability in favor of boosting its sales and marketing spend (leading to sharp,
regular deficits in its quarterly results), how fast Airbnb can grow through higher spend is a key question for the highly-backed, San
Francisco-based private company.Here’s the tally of guest stays in Airbnb’s during New Years Eve (data via CNBC, Jon
Erlichman, Airbnb), and their resulting year-over-year growth rates:2009: 1,4002010: 6,000 (+329%)2011: 3,1000 (+417%)2012: 108,000
(248%)2013: 250,000 (+131%)2014: 540,000 (+116%)2015: 1,100,000 (+104%)2016: 2,000,000 (+82%)2017: 3,000,000 (+50%)2018: 3,700,000
(+23%)2019: 4,500,000 (+22%)In chart form, that looks like this:Let’s talk about a few things that stand out
First is that the company’s growth rate managed to stay over 100% for as long as it did
In case you’re a SaaS fan, what Airbnb pulled off in its early years (again, using this fun proxy for revenue growth) was far better than
a triple-triple-double-double-double.Next, the company’s growth rate in percentage terms has slowed dramatically, including in 2019
At the same time the firm managed to re-accelerate its gross guest growth in 2019
In numerical terms, Airbnb added 1,000,000 New Year’s Eve guest stays in 2017, 700,000 in 2018, and 800,000 in 2019
So 2019’s gross adds was not a record, but it was a better result than its year-ago tally.
