airbnb

# Book rooms with locals, rather than hotels.

Belong anywhere — a web platform connecting travelers with local hosts worldwide.

Seed Round · 2009
airbnb
The problem

## Travelers overpay for sterile hotels while millions of empty rooms sit unused.

01
Price: Hotels are expensive
Budget travelers overpay — no affordable, human alternative exists online.
02
Disconnect: Hotels feel transactional
Travelers are isolated from the city, the culture, and the locals who live there.
airbnb
Solution

## A web platform where users can rent space to host travelers — belong anywhere.

Save Money
Travelers book rooms at 50–80% below hotel rates.
Make Money
Hosts monetize spare space — avg $600–$900 / month.
Share Culture
Real local experience — no hotel lobby, no checkout desk.
airbnb
Market validation

## 660,000 people on Couchsurfing prove demand — travelers want local, not hotels.

660K
Couchsurfing members — free, unmonetized demand
Craigslist
Millions of temporary housing listings show host supply

Neither platform charges for the transaction. Airbnb adds trust, payments, and discovery.

airbnb
Market size

## 15% of budget travel online = 84M trips — a $2.1B annual revenue opportunity.

560M budget trips/yr × 15% online share = 84M trips × $25 take = $2.1B

SAM: US + EU budget+online bookings. At 10% commission on avg $250 nightly rate.

airbnb
Product

## Three clicks to book — Search, Book, Travel.

1
Search — enter city, dates, guests
Listings with photos, reviews, and verified hosts appear instantly.
2
Book — secure payment, instant confirmation
Funds held in escrow; released to host 24h after check-in.
3
Travel — arrive, belong, review
Two-way reviews build a trust graph that improves every stay.
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Business model

## 10% commission on every transaction.

80K transactions/yr × $26 avg take = $2.1M

No inventory risk. No fixed costs. Every booking is pure margin above the payment processing fee.

airbnb
Adoption strategy

## Events, partnerships, and Craigslist cross-posting drive grass-roots supply.

Events & conferences — partner with SXSW, DNC, major conferences to capture accommodation overflow
Craigslist cross-posting — auto-post new listings to reach existing supply-side intent
Travel blogger partnerships + media — earned press generates traveler demand at $0 CAC
airbnb
Competition

## Airbnb is the only solution that is affordable, online, and transaction-enabled.

Solution | Affordable | Online | Transaction | Local connection
--- | --- | --- | --- | ---
airbnb | ✓ | ✓ | ✓ | ✓
Hotels | ✗ | ✓ | ✓ | ✗
Couchsurfing | ✓ | ✓ | ✗ | ✓
Craigslist | ✓ | ✓ | ✗ | ✗
B&Bs / Hostels | ✓ | ✗ | ✓ | ✗

airbnb
The founders

## Three founders who bootstrapped Airbnb from their San Francisco apartment.

Brian Chesky CEO & Co-founder Industrial design, RISD. Drove the brand, trust model, and host experience from day one.
Joe Gebbia CPO & Co-founder RISD design, product. Built the first site and the airbeds-and-breakfast concept that became Airbnb.
Nathan Blecharczyk CTO & Co-founder Harvard CS. Architected the payments, trust, and scalable search infrastructure from scratch.
airbnb
The ask

## Raising $500K for 12 months — targeting 80K transactions and $2M revenue.

$500K seed round
45% Product & engineering — mobile-first booking, trust & safety, payments
30% Growth & partnerships — events, Craigslist, travel media outreach
25% Operations — customer support, host quality, legal & insurance
airbnb
Market sizing methodology

## Bottom-up: 560M budget trips/yr × 15% online × $25 avg take = $2.1B.

1. Global leisure trips/yr: ~1.4B total. Budget segment (hostels, B&Bs, couch): ~40% = 560M trips.
2. Online booking penetration in budget segment: ~15% today, growing 30%/yr → SAM = 84M trips.
3. Avg nightly rate $250 × 10% commission = $25 take. 84M trips × $25 = $2.1B revenue.