Airbnb's $1B Debt Deal for Global Growth

Airbnb Inc. is an online marketplace that allows travelers to rent accommodations from local hosts in over 191 countries. The company just secured a $1 billion debt financing deal with major banks, JPMorgan Chase, Citigroup, Bank of America and Morgan Stanley.

Airbnb is not exactly struggling for money. The company raised $1.5 billion last year, valuing the company at $25.5 billion. So what exactly will a multi-billion-dollar company do with another billion?

The company is rumored to spend the extra financing to develop new services and fund growth initiatives. They plan to focus on growing the company globally and expand their company past home-sharing. They are currently working on building add-on travel services, like the hotel-style packaging amenities they tested out in Sonoma, Calif. in April. (Want to be an Airbnb host, read: 5 Things Airbnb Hosts Can Be Liable For.)

Airbnb has also tested out a myriad of other services, including an art gallery tours, personal chefs, and bicycle rentals that customers can book and utilize when they rent an accommodation. (For more, see: The Pros and Cons of Using Airbnb.)

The company’s goal is to become a full-service travel company, and its innovation has been criticized by many. However, Airbnb CEO, Brian Chesky, said earlier, “Customers are willing to try new things, and if you can survive, you will have fewer competitors. It's like entering the eye of the storm. As long as you are strong enough to survive, you can end up in still water by yourself.” Airbnb’s growth strategy has proven successful for them, especially over the past five years as the company has grown at great lengths.

It will be exciting to see what exactly Airbnb does with their $1 billion debt, but as a traveler, expect that it will be something exciting.