When it comes to the sharing economy, few companies have made as significant an impact as Airbnb. The platform, which allows homeowners to rent out their properties to travelers, has revolutionized the hospitality industry. But when did this disruptive startup first turn a profit? This article delves into the financial journey of Airbnb, exploring its initial struggles, eventual profitability, and the factors that contributed to its success.

The Birth of Airbnb

Airbnb was founded in 2008 by Brian Chesky, Joe Gebbia, and Nathan Blecharczyk. The idea was born out of necessity when the founders, struggling to pay rent, decided to rent out their loft to attendees of a local conference. They quickly realized the potential of their idea and launched Airbnb (short for AirBed & Breakfast).

Initial Financial Struggles

Despite its innovative concept, Airbnb faced significant financial challenges in its early years. The company struggled to attract investors, and the founders even resorted to selling custom cereal boxes to keep the business afloat. However, their persistence paid off when they secured a $20,000 investment from Y Combinator in 2009, which helped them refine their business model and expand their operations.

Securing Major Investments

After its stint with Y Combinator, Airbnb began to attract the attention of major investors. In 2010, the company raised $7.2 million in a funding round led by Greylock Partners and Sequoia Capital. This investment allowed Airbnb to expand internationally and grow its user base significantly.

Revenue Growth and Profitability

Airbnb’s revenue began to skyrocket as it expanded globally. By 2011, the platform had over a million listings and had facilitated over 10 million nights booked. Despite this impressive growth, Airbnb was not yet profitable. It wasn’t until 2016, eight years after its founding, that Airbnb finally turned a profit. The company reported a profit of $100 million on $1.6 billion in revenue for the year.

Factors Contributing to Airbnb’s Profitability

Several factors contributed to Airbnb’s path to profitability. The company’s unique business model, which involves minimal ownership of physical assets, allows for high scalability and low operational costs. Additionally, Airbnb’s focus on user experience and community building helped it to stand out in a crowded market and build a loyal user base.

The Impact of COVID-19 on Airbnb

Despite its previous success, Airbnb was hit hard by the COVID-19 pandemic. Travel restrictions and safety concerns led to a significant drop in bookings, and the company reported a net loss of nearly $700 million in the first nine months of 2020. However, Airbnb has shown resilience, adapting its offerings to cater to changing consumer behaviors and focusing on local travel experiences.

In conclusion, Airbnb’s journey to profitability is a testament to the power of innovation and persistence. Despite initial financial struggles and recent challenges posed by the pandemic, the company has managed to carve out a significant niche in the hospitality industry. Its story serves as an inspiration for startups everywhere, demonstrating that with a unique idea and a relentless drive for success, profitability is achievable.


Alex likes to write about anything related to technology, marketing and gadgets. He sometimes reviews the latest tech and also writes on other blogs.