Airbnb is in talks to acquire Luxury Retreats. The former, which facilitates living spaces across the world, is looking to offer high-end homes to folks with money to spare through its acquisition of the latter. While terms of the deal have not been disclosed yet, it it rumored to be costing Airbnb somewhere around $200 million.
The acquisition makes a lot of sense. If you want to become the service provider for offering living spaces, you have to cater to customers at both the ends of the spectrum. Considering that Airbnb started out as a platform that lets folks offer bed space, it had that end pretty much covered. And while it also has offerings at the opposite end, acquiring Luxury Retreats will help the company ramp up its product in a big way.
TechCrunch cites a source as saying:
[Airbnb] is deeply interested in the company because of their extremely talented team with deep experience in the luxury segment. Their capability in the luxury is unrivalled and complimentary to the capabilities at Airbnb.
The acquisition comes at a crucial time for Airbnb. The company is doing pretty well and according to rumors, is considering an IPO this very year. It is well stocked up on funds as well and has managed to raise over $3 billion till date. The business started generating profits for the first time ever, in the second half of 2016. The acquisition would allow Airbnb to continue expanding its range of services into more verticals.
Meanwhile, Luxury Retreats would be Airbnb’s largest acquisition till now. The firm has over 4,000 properties spread across the world including a string of high-end villas and islands. It has managed to raise somewhere around $16 million in two rounds led by iNovia Capital and as per sources, has already turned profitable. The Luxury Retreats portal is also characterized by its selectivity, that sees merely five percent of applicants home get selected.
Meanwhile, Airbnb is expected to vote over the acquisition this week. We will let you know when we here something more about the topic.