A former Facebook executive reveals why she's so bullish on Airbnb, the $31 billion startup with 'virtually no competition' that everyone wants to see IPO in 2019
- Airbnb investor SC Moatti is among the few dozen investors who stand to turn a huge profit if the home-rental startup goes public in 2019, as many believe it will.
- Moatti, a managing partner of Mighty Capital, said she first used Airbnb as a host. The user experience blew away her expectations.
- She decided to invest because she says Airbnb could be at least four times as much as its current $31 billion valuation in the future, has "virtually no competition," and "infinite" inventory.
The first time tech investor SC Moatti met entrepreneur Joe Gebbia, the two were sweating it out at a Japanese martial arts class in San Francisco.
It wouldn't be Moatti's last encounter with Gebbia, an aikido enthusiast and one of the richest young tech founders in America. His startup Airbnb was last valued at $31 billion, and Moatti is among the few dozen investors who stand to turn a huge profit if the startup goes public in 2019 (though Airbnb has been quiet on the subject).
"Call me a sucker, but I'm totally a fan," Moatti said.
Moatti is a managing partner of Mighty Capital, a growth-stage venture firm she launched in 2016 with the some of the money she made selling her previous company to Facebook.
The modest $13 million fund invests almost exclusively in product-driven companies, via deals that she sources from her organization Products That Count, which puts on networking events for more than 200,000 product managers and entrepreneurs.
When an investor in the Products That Count network told Moatti that there may be a spot for her in one of Airbnb's funding rounds, Moatti jumped at the opportunity. However, she declined to share which round of financing she participated in.
Airbnb has completely upended the hospitality industry. For many guests, especially younger generations, "it is the way to travel," Moatti said. For many hosts, it's part of their livelihood. On any given night, over 2.5 million people stay in an Airbnb rental.
"For most people, this is financially a game-changer. When you start to have that kind of impact on people's lives, it's really hard to just disappear," Moatti said.
"Airbnb has virtually no competition," she went on. "Yes, there are others who do it, but in terms of the brand recognition, the runway, the traction they have, it's sort of unparalleled. I'm comparing to HomeAway, I'm comparing to Marriott. There's immense room to grow without having a ton of competition. It's very rare."
With a valuation of $31 billion, the private company is almost worth Hilton and Hyatt combined. Moatti believes Airbnb could be worth at least four times as much in the future, surpassing the world's largest hotel chain, Marriott, in value.
Airbnb added a number of hotels on its platform in February, which Moatti suggests is evidence of the company's enormous potential. It's grown beyond its beginnings in helpint users rent out their spare rooms to offer at least 15,000 hotel listings and new lines of business like its "Trips" product, which lets guests book experiences like going truffle hunting or driving classic cars.
"Their inventory is infinite," Moatti said.
Try before you buy
Moatti's first interaction with the home-rental startup was actually as a consumer.
After she sold her mobile software company to Facebook in 2012, she planned to travel for a bit. She listed the spare bedroom in her apartment on Airbnb, which was quickly becoming something people not only talked about but actually used.
"At the time, it was a little out there," Moatti said.
She was nervous for her first booking, so she reached out to customer support. The agent recommend Moatti make her guests feel welcome, tell them it was her first time, and maybe leave a gift. Moatti treated the couple to some cheese, chocolate, and a bottle of wine.
"They loved it. And actually, we stayed in touch. We became friends," Moatti said.
Indeed, Customer support has blown away her expectations.
Airbnb recently sent a photographer to her home to take stunning images of the apartment for her listing - helping Airbnb attract customers, and Moatti to woo travelers looking for accomodations.
Moatti boasts that she's now a "superhost," a recognition that she is highly rated, responds to requests quickly, and frequently lists her room on the service.
When the opportunity to invest came along, Moatti said the decision was obvious.
"I'm excited because on a very organic, experiential level, it's a great product. It got me addicted, and I review dozens of products," Moatti said.
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