Airbnb, the service that matches budget-minded travelers with locals who are willing to rent out an extra bedroom, is getting a nice room upgrade.
On Thursday, the company announced it had raised $7.2 million in a Series A round of venture financing, led by Sequoia Capital and Greylock Partners. Prior to that, the company received $600,000 in an angel round.
Airbnb charges a booking fee of 6 to 12 percent, depending on the total cost of the stay.Airbnb, which started in 2008, was initially conceived as a way for budget-conscious travelers to find affordable accommodations — usually a spare couch to sleep on or an extra bedroom. To make money, Airbnb charges a booking fee of 6 to 12 percent, depending on the total cost of the stay.
But since then, the company said, the listings on the site have become much more sophisticated.
“We started by renting out spare rooms in our apartment, but it’s grown to entire apartments, homes, castles, boats, even private islands,” said Joe Gebbia, one of the founders of the site.
In order to keep that momentum going, the company also released an application for the iPhone that lets people find and book a place to stay through the mobile phone.
Although Airbnb competes with travel booking sites like Expedia and Hotels.com, the company thinks it can carve out a niche for itself by offering adventure-hungry travelers more memorable traveling experiences. In addition, the founders said, the site offers entrepreneurial homeowners with a unique property the ability to rent out their spare bedrooms that larger travel booking sites don’t offer.
“If eBay grew into a billion dollar company by allowing people to monetize the stuff in their home, why can’t we do the same by letting them monetize their house,” said Brian Chesky, another founder.
Currently, there are more than 50,000 listings on the site in more than 8,000 different cities around the globe. The company said its popularity and visibility have increased drastically in the last few months. To date, more than 700,000 nights have been booked through the service, nearly 80 percent of them in the last six months, the company said.
The fresh infusion of cash will primarily go toward expanding its operations and hiring, the company said.
“We’re seeing a big explosion in Asia and South America,” said Mr. Gebbia.
“We’re in more cities than Starbucks,” added Mr. Chesky.