#bumble | #tinder | #pof Airbnb is lining up an IPO

PLUS: When corporate comms go bad.
October 30, 2020
TOGETHER WITH

Congrats to Alex, Austin, and the rest of our pals over at Morning Brew, which was officially acquired by Insider Inc. yesterday for a reported ~$75m. One word, one syllable: BOOM!

The Big Idea

Airbnb survived the pandemic and is on the cusp of an IPO

Airbnb is back from the brink.

Seven months removed from one of the darkest periods in CEO Brian Chesky’s tenure at the helm, things are looking a lot rosier.

The pandemic’s abrupt arrival in March brought travel to a halt, and with it, Airbnb saw a devastating drop in business. During one stretch, bookings in Europe were down 80% vs. the same period in 2019.

Hosts across the US were left with a cascading run of cancellations that threatened to cripple the company’s critical partners.

Short on cash, Chesky laid off thousands

He refocused on Airbnb’s core travel business, scaling back aggressive bets like Experiences.

Chesky provided refunds to guests, then had to repair relations with hosts, using part of a $1B lifeline from private equity firm Silver Lake to help.

Slowly, things started to turn

While Americans weren’t traveling overseas as much, or even cross-country, remote work created a new demand for shorter distance stays.

Average stay length increased 18% to 4.27 days from January to June, while bookings recovered and outpaced 2019 levels during the same period.

With things back on track, the company recently filed to go public, setting the stage for a December IPO that will likely be one of the year’s hottest debuts.

Who’s getting paid?

Not me, but a lot of other people.

  • Founders: Chesky and fellow cofounders Joe Gebbia and Nathan Blecharczyk are sitting pretty; Chesky’s stake is worth $3B to $4B.
  • Early investors: Y Combinator scored a 6% stake for $20k (this bet is going in the VC hall of fame) and legendary VC firm Sequoia got in early at the seed ($600k) and Series A ($7.2m) rounds.
  • Private Equity: Silver Lake lent the suddenly cash-strapped Airbnb $1B at an $18B valuation — roughly half what it was worth in 2017.

If this payday wasn’t enough, Airbnb just pulled a massive personnel coup, landing Apple’s former design chief, Sir Jony Ive.

Snippets
  • Earnings roundup: $AAPL’s iPhone slowed (waiting for the 12) but Mac sales were up; $AMZN’s sales are up heading into the holiday; $GOOGL and $FB both saw ad growth.
  • We on a boat: Wanderlust, a startup that helps marinas manage boats, just raised $14.2m.
  • Do good: Stripe rolled out a service to help companies “remove carbon as you grow your business.”
  • Whoop there it is! Whoop, the fitness tracker backed by Patrick Mahomes, raised $100m at a valuation of $1.2B.
  • Some good people invented a tactile pregnancy test that the visually impaired can use without compromising privacy.
  • Bonus: Tale as old as time… Netflix raised its prices, we pay.

 

Q&A

‘It’s all about finding where the customers are and going to them’

Jinx is a D2D — that’s direct-2-dog — brand that sells premium doggie kibble with an emphasis on superfoods and nutrition (if you’re feeling seasonal, here’s an apple and pumpkin treat ?).

Founded by 3 of the first 14 employees at the DTC sleep company Casper, the LA-based brand officially launched back in February.

We recently spoke with one of Jinx’s co-founders, Sameer Mehta, about his experience of launching a startup during a pandemic. Here’s an abridged version of our chat:

How have Jinx’s first 7-8 months gone?

Looking at performance, we’ve blown past expectations on one key metric: subscriptions. We aimed to have 40% of our customers as subscribers in year 1 and we’re already at 70%.
Once you get a dog hooked to a specific kibble, it’s hard to switch them off of it.

Is there any famous dog owner you’ve hooked?

[Cleveland Browns wide receiver] Odell Beckham Jr. feeds his dog Jinx!

What have been some keys to your success?

COVID changed a lot of behavior, so we switched up our approach by establishing new types of partnerships:

  • Postmates: People are obviously ordering online more, so we made sure to get our product on a delivery app.
  • Barry’s Bootcamp: There’s crossover between our customers so I reached out to them for a collaboration: a joint workout for dog owners and dogs.
  • Petco: Jinx is the first DTC dog nutrition brand to launch on Petco, the major pet retailer.

It’s all about finding where the customers are and going to them.

How big is the dog food opportunity?

The entire dog food market is $20B. Dry food (where we compete) makes up 95% ($19B), and fresh food makes up 5% ($1B).

Owners are crazy about their pets and the entire dog nutrition category is growing.

(Read the full Q&A here)

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Small Talk

Corporate people getting busted for stuff they say

The WeWork drama keeps on keeping on.

Last October, SoftBank tried to salvage WeWork’s failed IPO by making an offer to take over the beleaguered real estate startup for $9.5B.

The bid included $3B for WeWork shareholders, including those owned by its ex-CEO, Adam “shoes are optional” Neumann.

Well, SoftBank’s CEO Masayoshi Son didn’t want to pay out

In a series of undated texts that recently came to light, Son asked one of his top lieutenants (Marcelo Claure) to delay the tender offer:

  • Son: “It’s great to postpone the close of tender… Use whatever excuse to make senses [sic].”
  • Claure: “Ok. Will use antitrust. I am turning good at excuses like someone I know very well :).”

The tender never went through and SoftBank was actually within its legal rights to walk away from the offer — but the texts don’t look great.

A few other not-so-great corporate communications

Here are 2 from our favorite Harvard dropouts-turned-billionaires:

  • Mark Zuckerberg once sent an IM to a friend outlining how he was going to screw the Winklevoss Twins: “Yeah, I’m going to f**k them… probably in the ear.”
  • Paul Allen (who was recovering from cancer at the time) overheard Bill Gates and Steve Ballmer discussing his future with Microsoft: “They were bemoaning my recent lack of production and discussing how they might dilute my Microsoft equity by issuing options to themselves and other shareholders.”

C’mon guys!

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