Airbnb sets terms for R40-billion IPO

Airbnb Inc. and existing investors are seeking to raise as much as $2.6 (R39.8) billion in a long-awaited initial public offering expected to cap the biggest year ever for U.S. listings.

The home-rental platform and some shareholders are offering 51.9 million shares at $44 to $50 apiece, San Francisco-based Airbnb said in a filing Tuesday with the U.S. Securities and Exchange Commission.

The filing also addresses the key question of Airbnb’s valuation as a public company. It would have a fully diluted market value of nearly $35 billion at the top end of the indicative range. That figure includes employee stock options as well as restricted share units.

Airbnb’s highest valuation as a private company was $31 billion in a funding round in 2017. Warrants in an April round of debt and equity securities that included Silver Lake and Sixth Street Partners valued the company at only $18 billion, Bloomberg News has reported.

Investors in Airbnb, along with its executives and directors, will be able to control the company through Class B shares, which will carry 20 votes each compared with one vote each for the Class A shares being sold in the IPO. Airbnb’s backers include venture capital firm Sequoia, which had 16.4% of the voting power leading into the IPO. Other top investors include Founders Fund with 5.4% and DST Global with 2.3%.

At $2.6 billion, the IPO would be the fourth-biggest in the U.S. this year, according to data compiled by Bloomberg.

New listings on U.S. exchanges have raised $152 billion this year, with roughly half of that by special purpose acquisition companies, or SPACs, according to data compiled by Bloomberg. Globally, 2020’s total of $317 billion in IPOs is second only to 2007, when $385 billion was raised, the data show.

Morgan Stanley and Goldman Sachs Group Inc. are leading Airbnb’s offering. Allen & Co., Bank of America Corp., Barclays Plc and Citigroup Inc. are also listed as underwriters. Airbnb plans for its shares to trade on under the symbol ABNB.