Airbnb to Buy Hotel Tonight
Airbnb Inc. announced a deal to acquire hotel-booking site Hotel Tonight Inc. Thursday for an undisclosed sum. The planned transaction comes as the home-sharing company seeks to bolster its inventory and build out what it has called an end-to-end travel platform ahead of an eventual initial public offering, according to people familiar with the negotiations.
Acquiring the closely held site gives Airbnb a way to show investors more growth potential and demonstrate it can branch out beyond its core short-term, home-rental business ahead of a share listing. While Airbnb has said an IPO could come this year or next, people familiar with the company’s plans say a listing is more likely to come in 2020, as Airbnb integrates Hotel Tonight and continues to build out other travel verticals and look at potential acquisitions.
Hotel Tonight, founded in 2010 and based in San Francisco, culls unsold inventory from hotel chains and offers discounted rooms to travelers seeking last-minute deals, typically in urban business districts.
Airbnb declined to disclose terms of its HotelTonight acquisition. Once the deal is complete, the HotelTonight app and website will continue to operate independently, with co-founder and CEO Sam Shank reporting to Airbnb’s president of homes, Greg Greeley.
“We started HotelTonight because we knew people wanted a better way to book an amazing hotel room on-demand, and we are excited to join forces with Airbnb to bring this service to guests around the world,” Shank said in a statement. “Together, HotelTonight and Airbnb can give guests more choices and the world’s best boutique and independent hotels a genuine partner to connect them with those guests.”
San Francisco-based HotelTonight garnered a valuation of $463 million with a $37 million Series E funding in 2017, according to Pitchbook In total, the startup has raised $131 million in venture capital funding from Accel and Battery Ventures, which have participated in nearly every funding round for HotelTonight. Other early investors include Forerunner Ventures and First Round Capital.