With Great Valuation Comes Great Responsibility 

In a latest development, global community accommodation startup, Airbnb, has raised $555 million of a $850 million worth Series F funding round. The round was led by Google Capital and Technology Crossover Ventures. According to Forbes, Airbnb, with its current valuation, is quickly surpassing hotel giants like Marriott, Hyatt and Hilton.

The Catch Here

Since its founding in 2008 by Nathan Blecharczyk, Joe Gebbia, and Brian Chesky, Airbnb has raised over $4 billion in capital. But the catch here is that most of it has been in the form of debt financing. In June this year, it had raised a debt funding of $1 billion. Just last November, it had gone for a $1.6 billion equity round. Now with this Series F funding, Airbnb, which had started feeling the pressure to go public, can now heave a sigh of relief.

But Here Are the Repercussions

With such rounds, big companies like Uber and Airbnb have resisted going public till now. There has been only one IPO this year in the U.S. when a company named Twilio went public in June. Many have deemed 2016 as the second worst year for the U.S. IPOs after 2008’s market crash. National Venture Capital Association claims that the average time to go for IPO by a company has doubled in the last 20 years. Also, there has been no IPO from the tech startups until now this year.

If a company doesn’t go public, it doesn’t need to show transparency and release tax return info to its customers and clients. This scenario creates worries against public interest as such big private establishments could easily conceal their activities thus creating a back door to another global meltdown.

What are your thoughts on the need to go public? Share your thoughts in the comments section below.

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