Thursday was among Airbnb’s biggest days ever. After years of work, the home-sharing company said it would expand beyond its roots in lodging to also let travelers book activities, cars, and restaurant reservations. In short: it became a tourism company.
Airbnb is also an eight-year-old startup valued at $30 billion that will likely file to go public sometime soon. And considering the regulatory troubles it has worldwide over issues like collecting hotel taxes, new revenue streams are sure to make investors more comfortable with its business model.
And Airbnb isn’t the only contemporary so-called “unicorn”—a startup valued at more than $1 billion—to diversify as it inches toward a potential IPO. This week, word got out that Snap, the newly-formed parent company of teen sensation Snapchat, has confidentially filed to go public next year. The company rebranded to Snap last month when it unveiled—you guessed it—a second product: a pair of video-recording sunglasses.
Like most other social media companies, Snapchat, the app, makes its money from advertising. But it’s unsurprising that the company is thinking beyond the smartphone app to expand its business, especially at a time when Twitter continues to struggle with adding new users and even recently considered a sale.
Other unicorns with new-fangled business models are taking similar approaches. Ride-hailing company Uber has expanded into deliveries. Meanwhile, office co-working company WeWork has branched out from renting office space to startups by the month and is now signing up big companies as long-term tenants while signing less risky real estate deals, such as sharing its revenue with landlords instead of paying rent. And the list goes on.
Whether diversification persuades public market investors that these businesses are stable remains to be seen. But one thing is certain: 2017 will be a year to watch. It may be the beginning of a cascade of consumer unicorns going public.
Kia Kokalitcheva
This is the Startup Sunday edition of Data Sheet, Coins2Day ’s daily tech newsletter, edited by reporter Kia Kokalitcheva. You may reach me via Twitter, email, or an entirely new platform that your startup developed. Feedback welcome.
Everyone's Talking About
DraftKings/FanDuel. Finally, the two daily fantasy sports companies after never ending rumors that they would. DraftKings CEO Jason Robins will take the chief executive job in the new company, while FanDuel CEO Nigel Eccles will become chairman. The merger is expected to help put the resulting company on a path to profitability and reduce costs for marketing, legal, and so on. (Reuters)
Unicorn Watch
Snap files for IPO. Snapchat's parent company has reportedly confidentially filed to go public as soon as next March. (Wall Street Journal) (Coins2Day)
Airbnb expands beyond lodging to include “experiences.” The home-sharing company unveiled its push into becoming a tourism company, now letting travelers book activities, attend meetups, and more. (Coins2Day)
WeWork expands in China. The office co-working company inks a deal with real estate company Sino-Ocean Group. (Coins2Day)
Lyft trades its mustache for a colorful device. The ride-hailing company unveiled a new device that it hopes will make it easier for riders to identify their ride. (Coins2Day)
The Week in Startups
BuzzFeed Authorizes $200 Million Fundraise (Coins2Day)
Hyperloop One Settles Suit Alleging Mismanagement and Infighting (Coins2Day)
Andreessen Horowitz Just Led a $15 Million Investment Round in PeerStreet (Coins2Day)
Led By Google Veterans, Heptio Has Snagged $8.5 Million (Coins2Day)
This Startup Built a Bot That Will Fight to Lower Your Comcast Bill (Coins2Day)
Handshake, a Job Search Software Company for Colleges, Just Raised More Cash (Coins2Day)
Salesforce Just Backed Sigfox, a French Wireless IoT Startup (Reuters)
Benchmark Invested in Another Social Network: Video App Marco Polo (Recode)
500 Startups Ditches the ‘Accelerator’ Brand as it Looks to Differentiate (TechCrunch)
Sesame Street’s VC Fund Makes Its First Investment in Tutoring App Yup (TechCrunch)
Words of Wisdom
"Where I work, in the Silicon Valley venture capital industry, the most appealing businesses to invest in remain these social media centric companies, for they are so engaging, so addictive, that they require less outside capital to grow than almost any other type of business in the world."— Founders Fund partner Geoff Lewis, on the power of social media networks in today's society. (Medium)
