I recently sat down with Brian Chesky, co-founder and CEO of Airbnb, a room-rental service that is reportedly raising $100 million for a $1 billion valuation. One source says the stories are simply just "rumor." But the company is raising funds, and is certainly growing like gangbusters. In one of our interviews, Brian says that the company had already booked about $150 million in revenue (1.5 million reservations to-date with the average reservation between $70 and $200) since inception and is growing revenue between 30% and 50%, each month.
If the company generates $50 to $75 million in sales this year, one could see why a valuation could be pretty high. In this interview, the first of our series, Brian talks about how quickly Airbnb has grown.
(Note: Since this interview was conducted earlier in May, I did not ask Brian about the fundraising).
After launching in 2008, Airbnb is in every country with the exception of The People's Republic of Congo and North Korea, said Brian.
What are the most profitable rental opportunities? I asked.
"People renting bedrooms or apartments in major national cities, Paris, NY, London, Berlin, San Francicso, Hong Kong for about $100 to $200 a night. Most tourism centralizes to major cities," he said.
How big is the market to rent one bedroom? "We don't know," said Brian. "We're creating the market. So, it's hard to size it... We think it's similar to the vacation rental market $24 billion in the US and $100 billion around the world."
I also asked if Airbnb was moving into vacation rentals or sublets. Brian talks about the four markets Airbnb is pursuing today.
Today, there are three major markets we're addressing: 1) Someone renting an extra bedroom 2) Someone renting homes and apartments in big cities 3) Someone renting a second home - this market is just beginning for Airbnb 4) Someone subletting (30-day rentals)
The sublet market is the one Airbnb sees big opportunities in. "Subletting is a huge market." said Brian, though he didn't have a good measure of market size.
We also talk about his thoughts on why Fred Wilson of Union Square Ventures passed up on Airbnb. I won't get into the entire interview, you'll have to watch.