Airbnb may have additional challenges to navigate as it looks to go public in 2020. The multibillion-dollar travel company lost money during the first nine months of last year, according to a report published by…
The Wall Street Journal on Tuesday.
The report said Airbnb posted a net loss of $322 million through September after making a profit of $200 million the previous year. It also said that while the company’s revenue increased to $1.65 billion in the third quarter, up $400 million from the year prior, costs grew faster.
That could give pause to investors, many of whom have become wary of businesses without a clear path to profitability after a crop of money-losing companies went public last year with mixed results and WeWork canceled its initial public offering.
Airbnb appears to be facing rising costs as it continues to grow, including a $150 million investment in improving the safety of its platform, as well as increased overhead expenses and sales and marketing costs.
The company has about $3 billion in cash on hand, and some investors think it has a stronger business model than companies like Uber and WeWork, but Tuesday’s report could mean the company will face increased pressure to prove that its financials add up.
Airbnb said last year that it expected to become a public company sometime in 2020, but sources told The Wall Street Journal that could likely mean the third quarter at the earliest and the timing could be affected by the Wuhan coronavirus outbreak.
Airbnb has worked hard to gain a foothold in China, but according to Tuesday’s report…
Continue reading at THE MOTLEY FOOL