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Friday 22 August 2014

Airbnb's Dublin pad could kick off €7bn services expansion

Adrian Weckler

Published 10/04/2014 | 02:30

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Airbnb chief technical officer Nathan Blecharczyk in their new Dublin offices - whiskey bottles and kegs adorn a themed, traditional Irish bar, but no alcohol is served
AirBnB's new suite of offices
AirBnB's new suite of offices
Nathan Blecharczyk expects the company to offer a lot more in a year's time

In Airbnb's creative new Dublin offices, whiskey bottles and kegs adorn a themed, traditional Irish bar. And in true Silicon Valley style, no alcohol is served there. "It might hurt productivity," said company co-founder and chief technical officer Nathan Blecharczyk.

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"We have a happy hour after work once a week, though. I think they have beer then."

There may be no stout for staff but when it came to picking a world headquarters, Silicon Valley's hottest accommodation service chose the land of bed and breakfasts.

One hundred new jobs accompanied a legal tweak to make Dublin its non-US world headquarters.

For the unacquainted, Airbnb is a website (and app) that allows you to book a room, apartment, house or just a couch to stay overnight. Initially aimed at tech travellers, the service has become wildly popular with over 500,000 listings in 192 countries.

But room, sofa and house rentals are not all that Airbnb will be doing, if Blecharczyk has his way.

"In a year's time, we'll be offering a lot more than we are now," he said. "Cleaning is one thing we've talked about publicly. But that's just one of many things."

His co-founder and chief executive, Brian Chesky, has given a little more detail about what to expect. In future, Airbnb will be a service that not only lets you reserve somewhere to stay, but allows you to book a car from the airport, food for your rental apartment and a cleaning service that makes sure you can leave without tidying up.

"All of these are interesting ideas and we're prototyping some of them," said Blecharczyk.

"Through our mobile app, we hope to connect you to all the services and providers who might make your trip better. And we're building relationships in countries [like Ireland] to make sure that we have access to the local service providers and the local knowledge."

Blecharczyk said that while no formal announcements are imminent, it's both a logical next step for the business and something for it to target a potentially huge new funding round on. According to Bloomberg and other US financial sources, Airbnb is about to land between $400m (€295m) and $500m (€368m) in one of the biggest private financing deals that would value the company at around $10bn (€7.3bn). The money is reportedly coming from one of the world's largest private equity firms, TPG Capital.

"Certainly the company has scaled very quickly over the last few years and I'd imagine that to continue," said Blecharczyk, who opted against giving specifics about any funding deal in the works. "So that implies a global operation and a diverse set of options. But it also means providing more services and conveniences as well."

If Airbnb's gargantuan funding round does cross the line, it will be yet another example of a tech firm opting for private liquidity over the circus of a public flotation. In a climate of massive venture capital deals, it's not hard to see why. IPOs bring quarterly filings, sneering analyst reports and stock market sharks.

Still, taking on half a billion dollars of debt (which is the old-fashioned word for such investment) must surely bring a new level of pressure.

"To be honest, there was way more pressure at the beginning when there was no money and big credit card bills," said Blecharczyk.

"Waking up not knowing if we had a real business or not? That was pressure. Today, I know we have a business. And it's a business that's been growing very strongly for five years and one I'm pretty sure will continue to grow and whose value proposition is very strong. So no, both our investors and I are very confident that any investment will be a good one."

There are still a few hurdles. For example, hotels don't exactly like Airbnb. That leads to lobbying which can result in episodes such as New York's Attorney General requesting files on Airbnb hosts to satisfy 'regulatory' requirements.

"It's a challenge but it's to be expected," said Blecharczyk.

"What we're doing is completely new. So we're trying to understand what the concerns are and then work with policy makers to modernise the rules.

"We certainly believe in regulation but a lot of it that exists is 30 or 40 years old. So it's time to rethink and update the regulations."

As for hotels themselves, they're doing just fine, he said.

"Hotels are having record occupancy rates. They're actually doing quite well. And we're doing quite well. So I don't think our success is coming at their expense."

As for why Airbnb chose Ireland as its international headquarters, the usual reasons apply.

"What stood out about Dublin is the existing ecosystem of companies here and the people they employ," said Blecharczyk.

"Quite simply, there's a diverse pool of talent here that is familiar with the industry and that we can hire from. Also, we need a lot of different people who can speak a lot of languages."

When in Dublin, Blecharczyk himself uses Airbnb, renting an apartment.

"Here in Dublin? Absolutely," he said. "I've stayed in hundreds of homes at this point. I've been a host as well. Come July, there'll be a full-time Airbnb unit in my home so I'll be a host every day."

Where can we sign up?

"It's going to be under my wife's name so it might not be obvious how to find it."

ADRIAN WECKLER

Indo Business

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