Airbnb Files to Raise $850M at $30B Valuation

Re:Airbnb Files to Raise $850M at $30B Valuation by spitfire on Saturday August 06, 2016 @12:26PM (#12238660)

A fairly simple DCF[1] based on public numbers. First the basic numbers.

From public data[2] in 2015 AirBnB did at least $360M in revenue, expecting to hit $900M by the end of that year. They never disclosed if they did hit that number, but lets assume they did.

So, 2015 Revenue is $900M.We'll assume a 8% yearly growth rate over the next 10 years. With a terminal growth rate of 4% after that.

I think we can accept 6% as a discount rate - The rate we'd otherwise get just shoving our money in a stock market index.

and based on those numbers, we get a valuation of $19774.14 Billion. to get a $30B valuation in this analysis they'd have to have 14% YoY growth for 10 years. Which I think is unrealistic.

[1] http://www.gurufocus.com/fair_value_dcf.php [2] https://www.quora.com/How-much-revenue-is-Airbnb-making

[ Parent | on HN ]

Re:Airbnb Files to Raise $850M at $30B Valuation by dsacco on Saturday August 06, 2016 @01:25PM (#12238935)

Thank you. This is the sort of reasoning I was looking for.

Now, I'd counter your argument here by stating that it appears Airbnb had over 100% growth in 2015, and Expedia and HomeAway had 24% and 20% growth respectively.[1]

Given that, is it unrealistic to assume the market can support 14% YoY growth (or higher) for the next ten years?

[1]: https://www.cbinsights.com/blog/airbnb-hospitality-industry-...

[ Parent | on HN ]

Re:Airbnb Files to Raise $850M at $30B Valuation by spitfire on Saturday August 06, 2016 @03:36PM (#12239540)

That is a question worth answering. But now we have reasonable ground to make statements one way or the other.

I personally think yes, they'll saturate their market fairly quickly from here on out. Also, I expect they'll start attracting competitors soon.

[ Parent | on HN ]