Airbnb makes it rain, turning a profit for the first time
The home-rental company became profitable in the second half of 2016 and is expected to stay that way through the next year.
Airbnb launched its "Trips" platform in November, which lets travelers choose homes, places and experiences put together by local hosts.
Airbnb has turned a profit.
The home-rental company became profitable for the first time in the second half of 2016, a source close to the company told CNET. Airbnb's revenue grew more than 80 percent over last year, and the company is expected to continue to be profitable throughout 2017, the source said.
Airbnb declined to comment for this report.
While Silicon Valley is known for being flush with cash and crowded with unicorn companies -- startups that have valuations of more than $1 billion -- making a profit is easier said than done. Startups like Sidecar, SpoonRocket and Vine have fizzled and died, and Airbnb's massive tech cohorts, like Uber, Amazon and Twitter, have recorded little to no profit.
Airbnb tends to have less competition than ride-hailing services or social media companies. It's a home-rental marketplace, founded in 2008, that's gone from catering to couch surfers to having a far-reaching online presence. It now has more than 2 million listings, with hosts in more than 34,000 cities in almost every country worldwide.
Initially, Airbnb focused its business model on taking a 9 percent to 15 percent cut from all home rentals booked through its site. But over the last year it has expanded into new areas like its "Trips" platform, which lets travelers book everything from homes to excursions organized by locals.
In this new era of Airbnb, the company appears to be morphing from a home-rental service into a full travel agent. This can be seen through its recent investments. For instance, it bought a stake in restaurant reservation startup Resy earlier this month, it's developing a flight-booking tool and it's said to be in buyout talks for the payment app Tilt. Airbnb will continue to engage in these types of investments, the source said.
Investors have been impressed with Airbnb's potential. The company has raised a total of $3.1 billion in venture backing, which makes it the fourth highest-valued venture-backed company in the world with a valuation of $30 billion. The source told CNET that almost all of that $3.1 billion the company has raised remains on the balance sheet.
As Airbnb grows, so does talk of going public. However, it appears the newly profitable company will hold off on an initial public offering for a while longer as it continues to hammer out legal issues with regulators around the world. Airbnb has knocked heads with lawmakers in cities in the US including San Francisco, New York, New Orleans and Los Angeles.
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