Welcome to Flashback Friday, when we take a look at the recent and distant past in the world of Founders. If you have ideas or tips for this weekly feature, please send them in to firstname.lastname@example.org.
This week, Airbnb led a $160 million financing round for hospitality platform Lyric. At the beginning of the month, Airbnb confirmed investment—for an undisclosed amount estimated to be between $150 and $200 million—in India budget hotel startup OYO. Ten years ago this month, Airbnb's founders, after years of rejection, received their first investment: $600,000 from Sequoia Capital in April 2009.
That investment came after the founders scrapped their company's original name: Air Bed and Breakfast. That name originated with a plan in 2007 by San Francisco roommates Joe Gebbia and Brian Chesky to put three air mattresses in their loft, rent it out and provide breakfast to the customers. Convinced they were on to something, the duo brought in another former roommate, Nathan Blecharczyk, and began trying to gain traction. It took a while. In 2008, after a third launch, they met with 15 investors, were rejected by eight and ignored by seven. Another relaunch at the 2008 Democratic Convention also failed, but selling "Obama O's and Cap'n McCains" cereal boxes—which they created—garnered the trio $30,000 for their company. From there, they went to the Y Combinator accelerator (where they also experienced investor rejection). Still, after working on the pitch and changing the name to de-emphasize their air mattress origins, Gebbia, Chesky and Blecharczyk got their seed money in April, 2009.
By 2011, Airbnb had reached unicorn status. The company had a $31 billion valuation two years ago during its last funding round. Should it have a public offering this year or next—founders have recently hedged speculation on an IPO timing—some sources believe its valuation is now closer to $38 billion. All three founders remain with the company.