

Ask HN: Why did AirBnB raise $100million? - alttab

So by now we've all seen the news that AirBnB has a valuation over a billion dollars, raising $100 million for a website connecting people who want to rent out their space and those that are looking for it.<p>OK, so they are running a market-place web-site. They hold no inventory, do no physical distribution, and if they ate their own dog food they would have very little overhead.<p>Now, I know they probably have (plans for) a large marketing team, a dedicated PR team, some engineers, and executive management. But just because they COULD raise $100 million, doesn't mean they SHOULD.<p>What are they using this money for? Is this considered a 'lean' round given their plans? Why hasn't the coverage of AirBnB gone into more depth of their business plan, or any sort of justification on this valuation and funding?<p>They may have a good run rate, revenue, etc, but I still can't see a clear reason a web-site would need to raise that much money in one go.<p>Is there anyone else who knows more behind this deal? With the recent IPOs, and Techcrunch already covering AirBnB-like verticals, I think understanding the drive behind the money (if any) is valuable for everyone in the industry to keep their head on straight...
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baggins
Marketing. They need more inventory IMO. Many of my favorite destinations are
sorely lacking in AirBnB rentals.

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happyfeet
They need lot of cash in hand to spread wider & penetrate the hotel market;
and probably to fight enough lobbying groups that might resist such large
scale disruption of market.

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tilt
So far they acquired a Germany based competitor to start their european HQ.
Guess the next closest step will be expanding in EU market.

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maxdemarzi
They probably cashed out early with part of that round like Groupon and Living
Social.

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petervandijck
Because they can.

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actionbrandon
My comment exactly. It would be insane to not take advantage of the valuations
in the market right now. I would have a hard time sleeping if I was a founder
right now. One big round, and then a race to an IPO before the party is over.

