What Airbnb does next

Protocol Index


Good morning, and welcome to Protocol Index, your daily pop-up report about the financial movements that matter to tech during the COVID-19 crisis. Want this in your inbox every morning? Subscribe here.

Today: Airbnb raised $1 billion, the 5G iPhone looks set to be delayed, and Martin Shkreli would like to be let out of prison, please.

What Matters Today

  • Eurozone finance ministers will meet to discuss a potential centralized stimulus package. Over €500 billion (around $540 billion) is under discussion, with investors hoping ministers will agree measures designed to kickstart the European economy. A European Guarantee Fund could provide €200 billion in liquidity for small and medium sized businesses.

Layoff Watch

Today's News

As of 3:40 a.m. PDT: Nasdaq Futures: 3.01% | Euro 600: 2.58% | Nikkei: 2.01% | Hang Seng: 2.12%




Everyone's Thinking About

What Airbnb does next

Everything should be going wrong for Airbnb. Travel has tanked. Everyone's asking for a refund. And a scary-looking stock market means that its planned IPO now looks pretty unlikely. And yet!

  • On Monday, Airbnb announced it had raised $1 billion in debt and equity from Silver Lake and Sixth Street Partners, two private investment firms.
  • That will get added to the $4 billion in cash and credit the company already has, according to CNBC.

The big question is what Airbnb actually does with all that cash.

  • It could extend its already considerable runway, which might be useful if travel stays on hold for much longer.
  • Or it could go into acquisition mode, snapping up competitors that don't have the resources to weather the storm. Companies like Sonder, which recently laid off a third of its staff, may now be up for sale. The big get bigger, and all that.

Yes, its IPO is in flux. But it's worth remembering that Airbnb wasn't really going public because it desperately needed the money — it was also doing it because its employees' options are about to expire. What happens for those employees is unclear, but the company itself should be OK.

Some things are changing, though. As The Information points out, Airbnb's funding press release made no mention of its forays into hotels or transport. Instead, it focused on short-term rentals, long-term stays, and experiences.

  • In fact, Airbnb's pandemic strategy could be a model for well-funded tech startups across all sectors: Focus on the core product and leverage scale to come out even stronger on the other side. Well, that's the theory, anyway.


  • "We have been working with [the Treasury Department] and should expect further guidance in the next day or so." — A spokesman for House Minority Leader Kevin McCarthy told Protocol's Emily Birnbaum that the issues around VC-backed startups getting small business loans are being resolved. Slowly.
  • "The chances for a [5G iPhone] launch in the September/October timeframe is 'extremely unlikely.'" — Wedbush says supply chain disruptions, travel restrictions, and the risk of releasing a flagship iPhone in a poor economic climate will lead Apple to delay the launch. Wedbush does expect a new iPhone SE in the next few weeks, though.
  • "We assume that [the downturn] will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008." — JPMorgan CEO Jamie Dimon in his annual letter to shareholders.
  • "The current exercise in physical distancing … has exposed important gaps in societies' digital readiness." — The Information Technology and Innovation Foundation's new report says governments should invest in universal broadband, robotics, and mobile payments to make sure they're prepared for future pandemics.
  • "Usually this time of the year is the peak season for Chinese startups to close deals. But … very few deals have been completed so far." — China Renaissance's Zhou Xiang on the slow recovery in the region. He added that "it is very difficult for Chinese startups to raise funding right now."
  • "SoftBank is considered a blight on the ecosystem, not a savior. The whole industry would be happier if they had never shown up." — Bullpen Capital partner Duncan Davidson, in a fantastic Forbes report on SoftBank's woes. And another gem from that story: "Son lately has been fond of presenting people with Rorschach-like images to drive home the point of perspective."

Closing Bell

Martin Shkreli just wants to help

In a new research paper written from prison, Martin Shkreli writes: "I am asking for a brief furlough (3 months) to assist in research work on COVID-19. Being released to the post-COVID world is no solace to even the incarcerated. As a successful two-time biopharma entrepreneur … I am one of the few executives experienced in ALL aspects of drug development." I have nothing to add.

Thoughts/feedback/tips? Email me — shakeel@protocol.com — or anonymously contact Protocol. And subscribe to get Index in your inbox each morning. Thanks for reading, see you tomorrow.

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