- Airbnb the home-sharing start-up was most recently valued at $31 billion in a 2017 funding round
- It’s had its valuation cut by a few of its investors recently — mutual-fund managers Principal Global Investors and Hartford Funds.
- The novel coronavirus pandemic has shut down travel, cutting into Airbnb’s revenues and raising questions about if people will want to open their homes to strangers once a vaccine for COVID-19 is introduced.
- Despite the pandemic, one mutual-fund investor, Macquarie, has actually increased its valuation of Airbnb since the virus broke out in the US.
- Visit Business Insider’s homepage for more stories.
Several mutual fund managers have slashed their internal valuations on $31 billion home-sharing unicorn Airbnb.
The start-up, founded by Joe Gebbia and Brian Chesky, has been hit hard by the novel coronavirus pandemic, which has halted travel worldwide. A recent story in The Wall Street Journal notes how Airbnb hosts reliant on the app for income are in danger of defaulting on their mortgages, and market-research firm AirDN estimates Airbnb saw $1.5 billion in bookings canceled in mid-March.
The start-up’s equity is held by several mutual funds, though not all mutual-fund investors have updated their portfolio holdings since the end of March, when the virus’ impact was felt most intensely in the US. Mutual-fund managers like Hartford Funds and Principal Global Investors, however, have revealed significant cuts to their internal valuations of the start-up.
Hartford’s $744 million International Equity Fund changed said AirBnB’s shares were worth $85.27 a piece as of the end of March — a decrease of more than 32% compared to what the fund valued the start-up at in the fall.
Principal’s $9.7 billion Large Cap Growth Fund, which Morningstar rates as five stars, cut its valuation of the start-up by more than 30% from the end of February to the end of March. The manager currently values its equity in Airbnb at $81.36.
Some of the industry’s biggest players, like Vanguard and Fidelity, own the start-up’s equity in their funds, but have not yet updated their holdings to reflect the managers’ view on Airbnb after the pandemic.
One fund though, Macquarie’s Optimum Large Cap Growth Fund, believes the start-up is worth more now than it was in the fall, when equity markets were near all-time highs. The $1.6 billion fund valued its shares of Airbnb at $116.03 a piece at the end of March — an increase of roughly $3 a share since the firm’s report at the end of September.
Hartford and Principal declined to comment, while Macquarie and Airbnb did not immediately respond to requests for comment.
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