When billionaire AirBnB founder Brian Chesky graduated from the Rhode Island School of Design, his parents wanted one important thing for him – a job with health insurance. Chesky reported that try for a bit with a Los Angeles design firm. But he soon found that 9-to-5 life was not for him. So, he packed up his Honda Civic and left for San Francisco where he planned an accident with his friend Joe Gabia. The two youths had agreed to split the rent in place of Gabia. The only problem was Chesky’s half-fare was $ 1,150 and he only had $ 1,000.
The week Chesky went to town in October 2007, San Francisco was hosting the huge Industrial Designers Society of America conference and all hotel rooms in the city were sold out. Chesky and Gabia had an idea. He decided to turn his home into a bed and breakfast for conference attendees. They did not even have extra beds or bedrooms, but they had three air mattresses. He provoked them and called himself Airbed and Breakfast. Three people stayed with Chesky and Gabia at the conference. Each paid $ 80 a night. For the price they also received a free breakfast and a tour around the city. And with that a $ 100 billion idea was born.
The idea was, and still is, revolutionary. They wanted to create a worldwide network through which anyone, anywhere could rent an extra room in their house so that some could earn cash. With the air mattress as a nod to his debut, he called it AirBnB. Through its website and app, travelers can book a room anytime, anywhere in the world. Airbnb has grown rapidly. It is now equivalent to a global hotel chain, even though technically, it does not own a bed. Airbnb also did something more revolutionary – it set up a shared economy that paved the way for companies like Uber.
Airbnb has thousands of people around the world living in Airbnb rooms every night. Cities like New York City, Los Angeles and Paris offer thousands of options for rooms. Airbnb is the largest short-term rental site in China – and there are no Airbnb offices.
Airbnb offers rooms, entire houses or condos for rent. The site has over 600 castles for rent. The site has teapis, urites, caves, water towers, private islands, motor homes, lighthouses, glass houses, igloos and even rented tree houses. In fact, AirBnB offers hundreds of tree houses and they are the most profitable listings on the website (per square footage). There are tree houses that have a six-month waiting list. Airbnb even offers a number of Frank Lloyd Wright homes for rent. In 2011, Prince Hans-Adam II offered the entire principality of Liechtenstein that was leased on AirBnB for $ 70,000 a night. The fare is completed with personal road signs and currency.
But Chesky is just a travel agent who specializes in lodging. Airbnb has created a culture of trust. Thousands of people are taking comfortably rented rooms in their homes to cater to strangers.
To rent a room in Los Angeles, a tree house in Vermont, or a yard in Canada, one simply goes to the Airbnb web site, signs up for it, and pays Airbnb by credit card. The company charges six to 12 percent of the rent from the guest and three percent from the host. The fee is paid to the host after the first night of the guest’s stay. Through the Airbnb website or app, both hosts and guests can verify each other’s identities with a driver’s license or passport. They also have access to each other’s email addresses, phone numbers and Facebook profiles. Any person who does not rent a room or rent a room in AirBnB is actually anonymous.
After the stay, guests and hosts rate each other online. This gives both parties a big incentive on their best practices. A series of bad reviews and you will never book or rent a room on Airbnb. The company provides $ 1 million in insurance against loss or theft to almost all of its hosts. This has helped unlock the culture of trust. During 2013, Airbnb generated $ 240 million in activity from unused bedrooms in Paris alone.
More than half of AirBnB’s hosts depend on the revenue they receive from guests to pay their rent or mortgage. AirBnB revolutionized the world by sharing the economy, not only to provide passengers with a staycation facility, but also to share their own ecosystem. Now, there are companies that will clean the host’s house before and after a guest arrives, coordinate major exchanges, cook for their guests, photograph their rooms for rent, and more. Companies like Uber and Lyft become guests’ car service. Whereas a decade ago, hotel and taxi services like Hilton such as Yale Cab – Corporation – were all trusted, nowadays, people rely on total strangers to provide the same service through sites like Airbnb, Uber, Handy, And many more. We now live in an era where anyone can be a micro-entrepreneur and serve others, and this is due in large part to Brian Chesky and AirBnB.
Today the platform has over 4 million AirBnB hosts and 7.4 million home rental listings.
Over the years Airbnb raised less than $ 6 billion in private investments. He received $ 20,000 in seed money from Y Combinator in January 2009. The company was valued at $ 2.5 million in this round.
Less than a year later, the company raised $ 7.2 million from a syndicate of investors (including Ashton Kutcher) at a valuation of $ 70 million.
Seven months later the company raised $ 115 million from a new syndicate (Jeff Bezos in this group) at a valuation of $ 1.3 billion.
As of April 2014, the company’s personal valuation rose above $ 10 billion.
The company was valued at over $ 25 billion in July 2015.
When the company raised $ 1 billion in September 2016, it valued the private market at $ 31 billion.
In April 2020, at the worst of COVID-19, AirBnB invested $ 1 billion in debt financing (as opposed to equity investment) essentially valued at $ 30 per share.
In early December, just weeks before the company’s expected IPO, AirBnB was valued at $ 47 billion, or $ 60-70 per share.
On the morning of the IPO, December 10, 2020, the company’s first market cap expected was $ 100 billion, or $ 150 – $ 160 per share.
Brian Chesky Net Worth
AirBnB’s IPO Brian Chesky is expected to sell approximately $ 100 million of its individual shares on the day. Even after this sale, he still owns around 76 million shares of the company. Brian Chesky is expected to have total assets of $ 11 billion when the company finally goes public.