Airbnb's $30 billion valuation at risk over illegal listings
What's worth its weight in banned offerings? Airbnb, according to one venture capitalist.
Drop illegal listings in San Francisco and New York from the site, and the company's valuation will drop, too, said Tusk Holdings founder and CEO Bradley Tusk, a former aid to New York Mayor Michael Bloomberg.
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"They are raising now at a higher valuation, but if you were to say 'here is what the New York and San Francisco markets are really worth in full legal compliance' and then re-run the numbers--however they do it--I don't know that they are still that $30 billion company," Tusk was quoted by CNBC as saying.
Says a source close to Airbnb: "This is sour grapes." Tusk sought out Airbnb, looking for consulting work, and Airbnb declined to hire him, according to the source. The source did not say when Tusk approached the company.
"He asked to be paid solely in equity--which isn't something you do if you think the company isn't doing well," says the source in an email. "And then...not coincidentally...he had negative things to say about Airbnb."
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Asked whether he had in fact sought to work for Airbnb and for comment on what the source referred to as "sour grapes," Tusk said in an email, "If I were Airbnb and found my business model decimated in two markets as big as New York City and San Francisco due to my own political ineptitude, I'd try to change the subject too."
CNBC reports New York City and San Francisco make up 2.4 percent of Airbnb's worldwide listings, citing Beyond Pricing, a pricing tool for Airbnb and VRBO (Vacation Rentals by Owner). With 34,000 listings, New York City had Airbnb's second highest count of places to stay as of February 2015. San Francisco, a much less populous city, has a meager 5,000 listings by comparison, but more than twice as many listings per capita as New York.
Airbnb is currently scuffling with New York and San Francisco over proposed laws that would hamper business activities. In New York City and San Francisco, Airbnb has faced controversy for reportedly cutting into housing stock already in relatively short supply.
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The New York State Senate passed a bill last month banning short-term apartment listings on Airbnb. San Francisco's Board of Supervisors recently passed an ordinance holding Airbnb liable for hosts that don't follow city law pertaining to registration of certain hosts. Airbnb is now suing San Francisco over the ordinance.
And it's all happening while Airbnb is raising a new round of funding at a $30 billion valuation.
Tusk told CNBC that "there are times when you have got to recognize the political reality of what you are dealing with."
"Affordable housing advocates are kind of likeable, so they are just harder to beat," he reportedly said.
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