Yesterday, Airbnb CEO Brian Chesky told CNBC that the company will be going public later this year. However, their IPO could break from the tradition of listing through middlemen such as underwriters. According to an article by U.S News, the company could be considering selling shares directly to the public. This would mean that the IPO will be a way for insiders to cash out, and not a way for the company itself to benefit from the IPO windfall. However, this isn’t a big deal. Airbnb is worth an estimated $31 billion, and the company has very little overhead. This means it isn’t really in need of money, and will do just fine without the IPO cash.
For investors looking to get into this IPO, the focus will be more on the company’s standing in the market, and its potential for growth. That’s where a SWOT analysis comes in handy.
One of Airbnb’s core strengths is its strong brand name. It’s one of the most recognized names globally in the home listing business. The company has a presence in over 192 countries and is a dominant player in all of them. In the U.S.A, which is one of its largest markets, the company had 37 million users in 2017. Those figures are projected to grow to 60 million by 2021. This essentially makes Airbnb a high growth company, and one of the biggest winners of the shared economy.
The company’s reputation is directly linked to the behaviors of the hosts. If the hosts are not good, and fail to follow the company’s guidelines, it directly affects the reputation of the company. The company also constantly finds itself constantly at loggerheads with the law in many countries, where tourists are not allowed to stay in residential areas.
The biggest opportunity the company has is the increased enactment of favorable laws that make it easier for home owners to list on Airbnb. This will in the long run present an amazing opportunity for the growth of this company. The company’s reputation has also been getting better over the years, creating a favorable environment that encourages more people to list, and guests to rent from them. Trust in Airbnb has been driven by ratings, and the increased number of celebrities listing their homes on Airbnb.
Laws and regulations still remain the biggest threat that Airbnb faces. The company has in the past faced lawsuits in different countries. In the past the company has been fined in cities like Barcelona for its operations. The company also faces the threat of competitors that have been coming up over the years. However, both of these threats are minor. In terms of lawsuits, tech companies face them all the time, and they still continue to thrive. As for the competition, Airbnb already has a head start, which makes it difficult for any other company to dethrone it.