Jeff Bezos double dips on his Airbnb game
Amazon.com Inc. AMZN founder Jeff Bezos made an early bet on the short-term rental platform Airbnb Inc. ABNB during the company’s Series B funding round in 2011, nearly a decade before its initial public offering (IPO).
His investment came long before the now-popular accommodation market became a household name and a common term used to describe virtually any short-term rental.
It’s unclear exactly how much Bezos profited from his pre-IPO investment in Airbnb, but it’s clear the billionaire investor had incredible foresight about the direction of the vacation rental market.
More recently, Bezos’ investment activity suggests he’s looking to profit from the other side of the vacation rental business – real estate investments.
Bezos was one of several prominent investors to participate in Homes arrived‘ seed round in 2021. Arrived Homes is a real estate investment platform that allows retail investors to become co-owners of single-family rental properties with an investment of $100 to $10,000.
Less than a year later, Bezos made an additional investment in Arrived Homes’ $25 million seed round, just before the company publicly announced it would expand its offerings to include properties from short term rental.
The company has already started acquiring properties for rent to travelers on Airbnb and is expected to make the first batch available to investors on its platform during the third quarter of 2022.
However, new investors may struggle to buy shares of the first batch of vacation rentals given how quickly Arrived Homes funded single-family properties on its platform. Existing investors have been the first to gain access to new offerings and the same will likely be the case once short-term rental investments go live.
Short-term rental market
Bezos’ renewed bet on the short-term rental market looks promising for the tech entrepreneur turned venture capitalist. Airbnb posted its highest profit in the second quarter of 2022 and an all-time quarterly record of 103.7 million nights booked. Quarterly room nights booked increased 25% year-over-year and average daily rates increased 1.7%.
With an average daily rate of $164, it’s no wonder short-term rentals are becoming such a popular asset class among investors. According to the real estate investment platform herevacation rentals generate up to 160% more revenue on average than traditional long-term rentals.
Here has so far funded seven vacation rental properties through its platform at a price of $1 per share and currently has an upcoming offering for a property in San Diego, CA.
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