Airbnb Creates Endowment, Advisory Board for Hosts Ahead of IPO
(Bloomberg) -- Airbnb Inc. is creating an endowment fund to help support its hosts as the home-rental startup prepares for an initial public offering.
The San Francisco-based company said it will place 9.2 million shares into the endowment and hosts will be able to apply for grants from the fund once its value tops $1 billion. The program will “give hosts a seat at the table, and an opportunity to take part in our company’s success,” Airbnb said in a statement Friday.
The grants would cover a broad swath of hosts’ financial needs, such as educational support, safety tools like noise detection controls inside rental properties or aid in natural disasters. Airbnb is also creating a host advisory board, which will be made up of 10 to 15 hosts from around the world who will provide input monthly on how the endowment is used. Airbnb said it will ensure the board is as diverse as its hosts, 85% of whom are outside the U.S. and 55% of whom are women. Airbnb said it may make additional stock contributions over time, up to a total of 2% of the company’s value.
“Our intention is to create a set of programs that give hosts a voice, a formal proposal process, and a meaningful fund to shape how we invest in the host community,” the company said.
Airbnb is weeks away from an initial public offering and is making various moves in preparation. The company told shareholders in an email this week it was splitting its privately held shares, which will lower its stock price per share ahead of the IPO. On Tuesday, it announced it will be listing on Nasdaq. The endowment fund is the company’s latest strategic step to prepare for its public debut -- and a move to reward its community of 4 million hosts.
Airbnb’s relationship with hosts became fraught earlier this year after the company issued a blanket refund policy amid the global coronavirus pandemic, allowing guests to cancel their reservations with no charge or penalty. Airbnb, which acts as a middleman between guests and hosts, typically allows hosts to set their own cancellation policies and decide when to allow a refund and how much they’ll give back if a booking is canceled on the platform. The decision to extend the cancellation policy out to grant full refunds due to Covid-19 eased criticism from guests who were afraid to travel, but infuriated hosts, who faced a loss in income. In response to the host backlash, Airbnb set up a $250 million fund to help hosts who had lost money in the pandemic.
In August Airbnb said it had filed confidentially with the SEC for an IPO. People familiar with the company’s plans said it will seek to raise as much as $3 billion in an IPO before the end of the year.
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