An inspiring story for a very inspiring company. Not only are the founders complete mensches, they're also superb designers to boot.
It's also an incredibly inspiring story of the power of Y Combinator. PG had a major hand in the success of this great startup.
Airbnb has raised $7,800,000 to date. Here is our complete financing history.
Airbnb approaches many investors in 2008. Most say "the market is too small." Some are concerned 2 of the 3 founders are designers, thus creating a founding DNA different from the success patterns they are looking for.
Running out of money, Airbnb starts selling collectible cereal, and makes $30,000 in the process. (See the Startup School talk for more about this here: http://www.justin.tv/startupscho...)
With their website low in traffic, their kitchen is without food. Airbnb starts living off their collectible cereal. This is a low point.
At a dinner with the founders of Justin.tv in November, 2008, Airbnb is convinced to apply for Y-Combinator, and gets accepted. PG says he is skeptical of the idea, but likes the founders because they "won't die," and are "very imaginative." Airbnb finally raises $20,000.
By Demo Day in April, 2009, Airbnb becomes "ramen profitable," and finally stops eating the leftover collectible cereal in their kitchen. Sequoia Capital takes notice. Sequoia leads a Seed Round of $600,000, led by Greg McAdoo. Keith Rabois, Kevin Hartz, and Jawed Karim of Youniversity Ventures participate.
700,000 room-nights booked later, Airbnb announces a Series A Round of $7,200,000 led by Sequoia Capital and Greylock Partners to expand from 8,000 cities to every city known to humankind. Reid Hoffman leads the round for Greylock Partners. New angels include Ron Conway, Jeremy Stoppelman, and Elad Gil.