Who can save Airbnb?

Airbnb’s angst has been a long time in the making, it starts with the trickling of skepticism in the media’s tone, and then all hell broke loose with the outbreak of Covid-19. The problem it faced seemed complex at first- distrust, ongoing lawsuits, fraud. But now all of a sudden, its problem is urgent and singular- Airbnb needs cash, a lot of it, and very fast.

To give the highest level and the most simplistic overview:

• Airbnb just raised $1bn of debt, at 10% + Libor rate (junk bond levels when the fed has cut rates to 0)
• Airbnb still needs $1bn more
• Airbnb is projected to lose $1bn by 1H

And here is a Haiku:

It raised high-yield debt

But it needs so much more still

How to save it now?

Airbnb recently got a lifeline from 2 growth capital firms and announced that it would focus on a higher margin business/corporate longer-term model to beef up the cash cushion. However, how to execute this strategy is unclear. The news first broke on TechCrunch but has little to no follow up on the company’s side.

However, from browsing its website, it is clear that Airbnb is throwing things on the wall to see what sticks. From offering remote Airbnb “Experience” through live streaming, frontline stays, it is trying to find a quick pivot.

Strategically, I believe focusing on higher-margin business travel stays is an important move even in…