Airbnb Inc., operator of a website that lets people rent out rooms and residences, is raising about $150 million in new funding that values the company at about $2.5 billion, said people familiar with the matter.
The funding is being led by Facebook Inc. (FB:US) investor Peter Thiel, and the deal has yet to close as negotiations are ongoing, said the people, who declined to be named because the talks are private. The Wall Street Journal reported earlier today that the company is likely to raise $150 million from Thiel and other investors.
Airbnb, a four-year-old startup in San Francisco, has gained popularity by connecting travelers with apartment and homeowners across the world, providing an alternative to hotels. The company raised $112 million at a valuation of about $1.3 billion in July 2011, in a financing round led by Andreessen Horowitz. Since then, the number of cities where Airbnb has listings has almost doubled to 30,743.
At $2.5 billion, Airbnb would be worth more than HomeAway Inc. (AWAY:US), the vacation rental website that sold shares to the public last year. HomeAway, founded three years before Airbnb, makes money by charging users an annual fee to list on its site. Airbnb generates revenue by taking a cut of every transaction.
Kim Rubey, a spokeswoman at Airbnb, declined to comment. Thiel didn’t immediately respond to requests for comment.
Thiel, 45, was the first outside backer of Facebook, investing $500,000 in 2004. The PayPal Inc. co-founder then started venture capital firm Founders Fund and has invested in startups including data and security software maker Palantir Technologies Inc. and Yammer Inc., which was acquired in July by Microsoft Corp. He made more than $1 billion from the sale of most of his shares in Facebook.
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