INSUBCONTINENT EXCLUSIVE:
Airbnb, the accommodation rental business, has been building up a larger profile as a travel services powerhouse to fill out its $31
billion valuation, and now it putting some pieces in place inside the company — specifically aimed at employee compensation — to prepare
for the next phase of its growth, which could include going as soon as June 30, 2019, but not later than late 2020.
Airbnb, the outsized
&startup& that now employs 4,000 people, is currently profitable on an Ebitda basis
Now, to give its employees more direct compensation from those spoils, it has created a bonus program that will provide cash bonuses to
employees in 2018 and 2019; and it has eliminated the one-year vesting cliff for those who have received equity grants for previous service
On top of this, Airbnb will now give all employees more choices with future compensation
Specifically, staff can can opt to take refresh grants in cash instead of shares if they choose.
The compensation announcements — made to
staff on Thursday, first reported by The Information, and confirmed to us by sources close to the company — underscore how Airbnb is
trying to keep people happy in an ultra-competitive market for talent, and how it is trying to get its ducks in line as it continues to
contemplate the best way to grow in future years.
Our sources indicate that the company has set a goal of being &ready to go public& on June
30, 2019 — one year from now — and that the aim is to IPO between then and before late 2020, which is when employee equity grants
expire.
Being ready entails not just sorting out employee compensation, but also getting other things in order
The company is still searching for a new CMO and new CFO — Jonathan Mildenhall left his position as CMO in May 2018; Laurence Tosi left
the CFO role in February— and it also searching for more independent members of the board
(It also been hiring.)
When it comes to IPOs, a lot of startups have made no secret of their longer-term intentions to go public, but Airbnb
has been far less open about its plans, and apparently, Airbnb executives and investors have been at odds over whether it should ever be
going public at all.
A public listing is often used as a way to help a company that is already growing, to scale faster, but IPOs come with
the added demand to be much more publicly accountable in terms of a company finances and other matters, such as regulatory issues.
These
days — aided by unprecedented amounts of cash available from private sources like well-capitalised VCs, private equity firms and more —
startups are staying private for much longer and doing their scaling without public scrutiny
And you can see why Airbnb — which has had its share of regulatory tussles and is in hot competition with publicly-listed travel
businesses — might not be so keen to follow that route, or at least why it been a point of contention up to now.
Airbnb has to date raised
nearly $4.4 billion in funding as a private company and reports say it is on track to make between $3.5 billion and $4 billion in revenues
this year from its business connecting travellers with private homes and an array of other related services.
