Airbnb was founded in August 2008 by Brian Chesky, Joe Gebbia, and Nathan Blecharczyk in San Francisco. The founding story is well-documented: Chesky and Gebbia, struggling to pay rent on their San Francisco apartment, decided to rent out air mattresses in their living room to attendees of an industrial design conference in the city. They created a simple website called "Air Bed & Breakfast" to advertise the space, hosted three guests, and charged $80 per night.
The concept proved viable, and the founders developed it into a broader platform for peer-to-peer accommodation rentals. Blecharczyk, a software engineer, joined as the technical co-founder. The company was accepted into Y Combinator, the prestigious startup accelerator, in early 2009, which provided funding and mentorship that helped the founders refine their business model.
Airbnb grew rapidly through 2009 and 2010, expanding from a few hundred listings to tens of thousands as hosts across the United States and internationally listed their properties. The company raised its first significant venture capital funding in 2010, including a $7.2 million Series A round led by Sequoia Capital and Greylock Partners.
By 2011, Airbnb had expanded internationally and was operating in dozens of countries. The company's growth was driven by the appeal of unique, local accommodations at prices often lower than hotels, as well as the income opportunity for hosts. Airbnb acquired several international competitors to accelerate its global expansion.
The mid-2010s brought both rapid growth and significant controversy. Airbnb faced regulatory opposition in many cities, where local governments argued that short-term rentals were reducing housing supply for long-term residents, driving up rents, and operating outside hotel regulations. New York City, San Francisco, Barcelona, Amsterdam, and many other cities implemented restrictions on short-term rentals, creating ongoing regulatory challenges for Airbnb.
The company also faced criticism related to discrimination. A 2016 Harvard Business School study found that guests with distinctively African-American names were significantly less likely to be accepted by Airbnb hosts than guests with white-sounding names. Airbnb responded by implementing anti-discrimination policies and requiring hosts to accept bookings without seeing guest photos or names in some cases.
Airbnb was valued at approximately $31 billion in a 2017 funding round, making it one of the most valuable private companies in the world. The company had been expected to go public for several years before the COVID-19 pandemic dramatically disrupted travel in 2020, causing Airbnb's revenue to fall sharply and forcing the company to lay off approximately 25% of its workforce.
Despite the pandemic disruption, Airbnb proceeded with its IPO in December 2020. The IPO was one of the largest of 2020, with Airbnb's stock opening at $146 per share, nearly double the $68 IPO price, valuing the company at approximately $100 billion. The strong IPO performance reflected investor confidence in travel's eventual recovery and Airbnb's dominant market position.
Following the IPO, Airbnb benefited from a strong travel recovery as pandemic restrictions eased. The company also benefited from the rise of remote work, which enabled longer stays and travel to non-traditional destinations. Airbnb introduced features to support longer-term stays, including monthly pricing discounts and filters for amenities important to remote workers.
In FY2024, Airbnb reported revenue of approximately $11.1 billion and approximately 460 million nights and experiences booked, with CEO Brian Chesky noting that the company "outpaced the travel industry's growth" in 2024.