Late Stage Mature Pre IPO Unicorns -

Airbnb aims to be ‘ready’ to go public from June 30, 2019, creates cash bonus program for staff

From Tech Crunch July 2018:

Airbnb, the accommodation rental business, has been building up a larger profile as a travel services powerhouse to fill out its $31 billion valuation, and now it’s putting some pieces in place inside the company — specifically aimed at employee compensation — to prepare for the next phase of its growth, which could include going public as soon as June 30, 2019, but not later than late 2020.

Airbnb,  the outsized “startup” that now employs 4,000 people, is currently profitable on an EBITDA basis. Now, to give its employees more direct compensation from those spoils, it has created a bonus program that will provide cash bonuses to employees in 2018 and 2019; and it has eliminated the one-year vesting cliff for those who have received equity grants for previous service to the company. On top of this, Airbnb will now give all employees more choices with future compensation. Specifically, staff can opt to take refresh grants in cash instead of shares if they choose.

The compensation announcements — made to staff on Thursday, first reported by The Information and confirmed to us by sources close to the company — underscore how Airbnb is trying to keep people happy in an ultra-competitive market for talent, and how it is trying to get its ducks in line as it continues to contemplate the best way to grow in future years.

Our sources indicate that the company has set a goal of being “ready to go public” on June 30, 2019 — one year from now — and that the aim is to IPO between then and before late 2020, which is when employee equity grants expire.

Being ready entails not just sorting out employee compensation, but also getting other things in order. The company is still searching for a new CMO and new CFO — Jonathan Mildenhall left his position as CMO in May 2018; Laurence Tosi left the CFO role in February — and it’s also searching for more independent members of the board. (It’s also been hiring.)

When it comes to IPOs, a lot of startups have made no secret of their longer-term intentions to go public, but Airbnb has been far less open about its plans, and apparently, Airbnb’s executives and investors have been at odds over whether it should ever be going public at all.

A public listing is often used as a way to help scale faster a company that is already growing, but IPOs come with the added demand to be much more publicly accountable in terms of a company’s finances and other matters, such as regulatory issues.

These days — aided by unprecedented amounts of cash available from private sources like well-capitalized VCs, private equity firms and more — startups are staying private for much longer and doing their scaling without public scrutiny. And you can see why Airbnb — which has had its share of regulatory tussles and is in hot competition with publicly listed travel businesses — might not be so keen to follow that route, or at least why it’s been a point of contention up to now.

Airbnb has to date raised nearly $4.4 billion in funding as a private company, and reports say it is on track to make between $3.5 billion and $4 billion in revenues this year from its business connecting travelers with private homes and an array of other related services.