Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.Its 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 companys flotation will be a key event in this coming years 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 thats ahead, were going to take periodic looks at Airbnb as we tick closer to its eventual public market debut.
And that means that this morning were 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 Years Eve each year, including 2019.
We can therefore look back in time, tracking how quickly (or not) Airbnbs New Year Eve guest tally has risen.
This exercise will provide a loose, but fun proxy for the companys 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 dont 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 Years Eve even with more guest stays and wed 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 Years 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 its 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.Heres the tally of guest stays in Airbnbs 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:Lets talk about a few things that stand out.
First is that the companys growth rate managed to stay over 100% for as long as it did.
In case youre 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 companys 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 Years Eve guest stays in 2017, 700,000 in 2018, and 800,000 in 2019.
So 2019s gross adds was not a record, but it was a better result than its year-ago tally.