A family on vacation leaves an apartment of Airbnb. Photo: VCG

Airbnb Inc said on Tuesday it is aiming for a valuation of up to $34.8 billion in its initial public offering (IPO), in what would cap a stunning recovery in its fortunes after the US home rental firm's business was heavily damaged by the COVID-19 pandemic earlier this year.

In a regulatory filing, Airbnb set a target price range of between $44 and $50 a piece to sell 51.9 million shares, which would pull in $2.6 billion. Airbnb could end up selling $2.85 billion at the upper end of the range.

Of the shares being sold, Airbnb founders Brian Chesky, Joe Gebbia and Nathan Blecharczyk will together sell nearly $100 million worth of shares during the IPO launch.

Airbnb struggled in the immediate aftermath of the pandemic as travel came to a grinding halt. It had to lay off a quarter of its workforce and seek $2 billion in emergency funding from investors, including private equity firms Silver Lake and Sixth Street Partners.

But as lockdowns eased, more travelers opted to book homes instead of hotels, helping Airbnb post a surprise profit for the third quarter. The San Francisco-based firm also gained from increased interest in renting homes away from major cities.

"Looking at Airbnb there's a lot to like. The company's third quarter has shown they've bounced back better than a lot of their travel rivals," said Matthew Kennedy, senior strategist at IPO research firm Renaissance Capital.

At the top of Airbnb's target range, the IPO will give Airbnb a fully diluted valuation, which includes securities such as options and restricted stock units, of $34.8 billion. This is nearly double the $18 billion Airbnb was worth in an April private fundraising round and above the $31 billion in its last pre-COVID-19 private fundraising in 2017.

Airbnb's market capitalization at $50 per share would total $29.8 billion. Chesky's stake would be valued at about $3.8 billion, while those of Gebbia and Blecharczyk would be worth about $3.5 billion each. Sequoia Capital, which first invested in Airbnb in 2009, would have a stake worth more than $4 billion.

Airbnb made its IPO registration public earlier this month. Reuters was the first to report in October that the startup was aiming to raise around $3 billion in its IPO that could value it at more than $30 billion.

Airbnb plans to list on December 10 under the symbol "ABNB" on NASDAQ.

Long-awaited IPO

Airbnb's stock market debut will be one of the largest and most anticipated US IPOs of 2020, which has already been a bumper year for flotations. Record label Warner Music Group, data analytics firm Palantir Technologies and data warehouse company Snowflake Inc have all gone public in the past few months.

Airbnb was launched by Chesky and Gebbia in 2008 as a website to take bookings for rooms during conferences, including the Democratic National Convention that year in Denver.

It has since expanded listings to include apartments, houses and vacation rentals, allowing millions of ordinary homeowners to make money by renting their flats and houses while on their own holidays.

Airbnb achieved "unicorn" status in 2011, with listed properties in 13,000 cities across more than 180 countries at the time, after being valued at more than $1 billion in a funding round led by Andreessen Horowitz.

Some of Airbnb's other investors include Hollywood actor Ashton Kutcher, buyout firms General Atlantic, TPG, Hillhouse Capital and investment management firms Vanguard Group and Fidelity Investments.

Morgan Stanley and Goldman Sachs are the lead underwriters for the IPO.

DoorDash's IPO and a planned listing by home rental startup Airbnb Inc are set to make December a busy period for IPOs unlike in previous years and mark a strong finish to a blockbuster year for new listings.

San Francisco-based DoorDash plans to float its shares on the New York Stock Exchange under the ticker 'DASH' on December 9. It had confidentially filed for an IPO in February.

DoorDash, the biggest US third-party delivery company for restaurants, plans to sell 33 million shares priced between $75 and $85 apiece, it said in a regulatory filing.

At the top of its target range, the IPO would give DoorDash a fully diluted valuation - which includes securities such as options and restricted stock units - of $31.96 billion, nearly double the $16 billion DoorDash was worth in a June private fundraising round. DoorDash's market capitalization at $85 per share would total $27 billion.

The hefty jump in DoorDash's valuation in a matter of months underscores the increased demand for meal delivery services during the COVID-19 pandemic, as well as anticipation of continued investor demand for new stocks which promise growth.

Companies have raised over $140 billion in the US so far in 2020, making it the biggest year ever for IPOs, according to data from Dealogic.