Airbnb China rings in the New Year by bursting into profitability
AIRBNB CHINA’S operation is set to end 2017 in profit, according to reports, accomplishing a rare feat for a large venture-funded Silicon Valley company.
As reported by CNBC, the disruptive technology company will end the year with bookings up approximately 50 percent from 2016.
“The third quarter was the strongest quarter in the company’s history and this year, we will be profitable, as measured by EBITDA,” Airbnb chief financial officer Laurence Tosi told CNBC.
CNBC reported previously that revenue last quarter hit about US$1 billion, up more than 50 percent from the same period last year.
Airbnb’s success in China is in contrast to other Silicon Valley tech startups, such as Uber, Lyft and Spotify, which have had less success.
For example, last quarter, Uber lost US$1.46 billion, a jump of nearly 40 percent year over year.
However, Airbnb also faces challenges in China. It has fierce competition from local rivals, as well as an abrupt executive departure and regulatory crackdowns.
Chinese home-sharing platform Xiaozhu has raised US$120 million in a funding round, while its other competitor, Tujia, has raised US$300 million. Furthermore, in October, the head of Airbnb’s China exited the company four months after taking the position.
Outside of China the company is facing other challenges, with growth of listings slowing in some major cities due to stricter regulation.
Still, Airbnb is proving that Silicon Valley companies have a success in one of the world’s most regulated Internet markets.
- Will AI put an end to the gig economy?
- Creating a recipe for sustainable data centers
- New types of malware surge by 70%, and cybercriminals increasingly target governments worldwide
- What could AI and automation look like in 2024?
- From AI-powered chips to chatbot: Here’s what was unveiled at AWS re-Invent 2023