Apartment-sharing startup Airbnb raised $1 billion from big U.S. banks. Fred Katayama reports.
A source says apartment-sharing startup Airbnb has raised $1 billion in debt financing from big U.S. banks. Airbnb will use the money, experts say, to expand into new markets like Cuba and invest in new services. Think local tours, food and beverage. Airbnb will also continue to explore different customer segments like corporate travel. Sean Hennessey of Lodging Advisors: (SOUNDBITE) SEAN HENNESSEY, CEO, LODGING ADVISORS LLC, ASST. PROFESSOR, NYU TISCH CENTER FOR HOSPITALITY & TOURISM, (ENGLISH) SAYING: "The fact that Airbnb was able to raise a billion dollars in financing signifies a couple of things. One, it gives them ready capital that they can use to expand their business. Secondly, it shows that financial institutions are comfortable with the company's ability to repay the loan." The source said JPMorgan, Citigroup, Morgan Stanley, and Bank of America extended the financing. Hennessey says big money from big banks could mean Airbnb will go public in the future. He says Airbnb is often compared to ride-sharing service Uber because they're both in the travel business, and they launched about the same time. But, unlike Uber, Airbnb makes a profit and operates in a niche with very little competition.