Airbnb

• 1. Introduction

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  Airbnb began not with venture capital or a business school pitch, but with an air mattress on the floor of a San Francisco apartment. In October 2007, roommates Brian Chesky and Joe Gebbia were struggling to cover their rent when a design industry conference descended on the city and left thousands of attendees without a place to sleep. Their improvised solution, a mattress in their living room paired with a homemade breakfast, pointed toward something neither of them had quite imagined yet. What questions does that origin leave hanging? How does a air mattress in a living room become a publicly traded company raising billions of dollars? How does a platform built on trust between strangers navigate discrimination, human rights accusations, surveillance concerns, and a global pandemic? And what happens when one of its own co-founders joins a federal cost-cutting body, triggering calls to boycott the very company he helped build?

• 2. The Air Mattress Business Model

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  Nathan Blecharczyk joined Chesky and Gebbia in February 2008 as chief technology officer, becoming the third co-founder of a venture they called AirBed and Breakfast. The site Airbedandbreakfast.com launched on the 11th of August 2008, offering short-term quarters to travelers shut out of a saturated hotel market. Raising money was not easy. The founders famously sold boxes of cereal branded after the two presidential candidates in the 2008 United States election, Barack Obama and John McCain, collecting roughly $30,000, mostly at that year's Democratic National Convention. That stunt caught the attention of Paul Graham, who invited them to the January 2009 winter training session of his startup incubator Y Combinator. Y Combinator gave them $20,000 and training in exchange for a 6% stake in the company. The founders used that money not to build new technology but to fly to New York and meet actual users face to face. They came back with a model that worked. By March 2009, the site had 10,000 users and 2,500 listings. That same month, the name was shortened to Airbnb to stop people from associating it only with air mattresses.

• 3. Funding and Growth

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  In April 2009, Sequoia Capital led a seed round of $600,000, with shares priced at one cent each. A year and a half later, Greylock Partners and Sequoia Capital together put in $7.2 million in a Series A. By July 2011, a round led by Andreessen Horowitz had grown to $112 million, with actor Ashton Kutcher and his partner Guy Oseary participating through their A Grade Investments vehicle. The valuation kept climbing. In April 2014, TPG Capital invested $450 million, valuing the company at $10 billion. Shares in that round sold for $20.36 each, split adjusted, compared to the one cent of the seed round five years earlier. A 2015 round of $1.5 billion brought in investors including Kleiner Perkins Caufield and Byers and Horizons Ventures. By September 2016, a Google Capital-led round placed the valuation at $30 billion. When Airbnb went public on the 10th of December 2020, it raised $3.5 billion on Nasdaq. The IPO offered shares to hosts on the platform at the price of $68 per share, a gesture toward the people who had made the business possible.

• 4. Discrimination, Hate, and Policy Pressure

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  Reports emerged that hosts were refusing lodging requests from guests whose names suggested they were Black. In July 2016, former Attorney General Eric Holder was hired to help build an anti-discrimination policy. One concrete outcome was hiding guest photos from hosts until a booking request is accepted, removing appearance as a factor in the decision. In August 2017, the platform cancelled bookings and closed accounts belonging to attendees of the white supremacist Unite the Right rally in Charlottesville, Virginia, organized by Jason Kessler, citing a terms-of-service requirement to accept guests regardless of race, religion, national origin, ethnicity, disability, sex, gender identity, sexual orientation, or age. The company's stance on hate groups later came under scrutiny from a different direction. In May 2024, a former Airbnb contractor alleged in a whistleblower complaint filed with the US Securities and Exchange Commission and Federal Trade Commission that the company had weakened its policies against extremists, dissolved the team responsible for removing them, and reversed a decision to remove the parents of Canadian far-right activist Lauren Southern after pressure from conservative media outlets. Airbnb denied the allegations. In August 2017, the company had drawn a clear line; seven years later, questions remained about where that line actually sat.

• 5. China, Surveillance, and Geopolitics

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  Airbnb's operations in China put it in an uncomfortable position between its own stated values and the requirements of a major government. Chinese law required the platform to send detailed guest information to government authorities, information that could be used to track individuals. In 2019, an Airbnb executive who was also a former deputy director of the Federal Bureau of Investigation resigned after six months, amid accusations that the company was too willing to share data with Chinese authorities. That same year, certain hosts in China were accused of discrimination by refusing to rent to Uyghurs. The company also faced allegations that it had allowed listings on land owned by the Xinjiang Production and Construction Corps, a Chinese state-owned paramilitary entity sanctioned under the Magnitsky Act for its role in the persecution of Uyghurs. In May 2022, Airbnb ceased operations in China entirely, citing the cost and complexity of complying with local regulations as well as a decline in business from COVID-19 lockdowns. China had by then represented less than 1% of company revenue. Two months earlier, in March 2022, Airbnb had suspended business in Russia and Belarus following international sanctions connected to the Russian invasion of Ukraine.

• 6. The Pandemic and Going Public

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  COVID-19 hit Airbnb at a moment of extraordinary scale. By October 2019, two million people were staying through the platform each night. When lockdowns began, bookings dropped as much as 96% in some cities, though rural areas saw an increase as people sought to escape dense urban centers. The company pledged $250 million to compensate hosts for pandemic-related cancellations. It also laid off approximately 1,900 employees, around 25% of its workforce across the Americas, Europe, and Asia. The December 2020 IPO, raising $3.5 billion, came less than a year after the worst of the booking collapse. The company posted net income of $1.893 billion in 2022, its first full profitable year after years of losses, including a loss of $4.584 billion in 2020 alone. By 2024, revenue had reached $11.1 billion, with North America accounting for the largest share at 45.1% and Europe, the Middle East, and Africa contributing 37.3%. The company employed 7,300 people that year, up from 5,597 at the depth of the pandemic layoffs.

• 7. Legal Exposure and Hidden Cameras

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  The platform's position as a broker, not a landlord, is central to how Airbnb defends itself in court. The company argues it is merely an intermediary, but courts have found it liable for negligence when it knew about dangerous conditions at a property and failed to act. In 2021, the company paid $7 million to an Australian guest who was raped at knifepoint in New York City on New Year's Eve 2015. Hidden cameras have produced a separate pattern of litigation. All indoor cameras are prohibited on Airbnb listings, but a CNN investigation concluded the company consistently fails to protect guests despite knowing the problem is persistent across the short-term rental industry. The company's own background check disclosures acknowledge that the checks should not be relied on to identify all criminal convictions or sex offender registrations, and that convictions including murder, terrorism, rape, or child molestation are not automatic disqualifiers for a host. Governments have also sued over tax and rental law enforcement; disputes over access to rental records have involved New York City, Boston, Miami, and Belgium. A lawsuit filed in July 2025 alleged the company was complicit in price gouging by hosts following the 2025 California wildfires.

• 8. What Airbnb Became

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  In November 2023, Airbnb acquired GamePlanner.AI, an artificial intelligence startup, extending a long list of acquisitions that included HotelTonight for $400 million and Luxury Retreats International for $300 million. The platform had grown from short-term stays to experiences, a magazine co-published with Hearst Communications called Airbnbmag, film production through its Rausch Street Films division, and a permanent ban on parties announced in June 2022. Through Airbnb.org, founded in 2012 with $6 million and 400,000 shares from the co-founders, the company facilitates free and discounted stays for people displaced by emergencies, working with the International Organization for Migration. In February 2025, co-founder Joe Gebbia joined the Department of Government Efficiency, prompting calls to boycott the company from people who believed his work there threatened democratic institutions. Four months later, in June 2025, Airbnb signed a three-year sponsorship deal with FIFA to provide official fan accommodation at the 2026 FIFA World Cup, co-hosted by the United States, Canada, and Mexico, and the 2027 FIFA Women's World Cup in Brazil. The company that started with an air mattress and a design conference now shapes where the world sleeps at major sporting events.