Vandalised home shows warts in billion dollar Airbnb

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Holiday let website under pressure to improve security

Airbnb, the private home rentals website valued at $1.3bn in a fundraising last week, is facing pressure to improve security for its customers after one blogger detailed how her apartment was “ransacked” by users of the service.

More than 2m nights of accommodation have been booked on the 3-year-old website, which functions as an Ebay-style intermediary to connect private home owners with spare rooms or short-term vacancies with holiday-makers and travellers.

As on other marketplace sites, reviews and social networking profiles of both hosts and guests are designed to build trust in a transaction that sees homeowners often hand over their front door keys to strangers.

Last month, a San Francisco-based blogger, writing under the pseudonym “EJ”, catalogued the theft and vandalism visited upon her home by Airbnb customers.

“Whoever these people were, they were living large and having one hell of a time for an entire week inside my home, unwatched, unchecked, free to do whatever destruction they wished. And damn, did they do a lot of it,” she wrote.

Abuse included credit card fraud, burnt possessions, bleach spread around the kitchen and bedroom, and blocked sinks in the bathroom.

“They smashed a hole through a locked closet door, and found the passport, cash, credit card and grandmother’s jewelry I had hidden inside,” EJ wrote. “They took my camera, my iPod, an old laptop, and my external backup drive filled with photos, journals … my entire life.”

The incident occurred at the end of June but the victim’s blog post was only picked up widely online this week, days after Airbnb said it had raised $112m.

The post provoked an outpouring of criticism on blogs and social networking sites and highlights the risks of greater abuse as Airbnb gains greater popularity. Publicity for the site has been fuelled in part by its eye-catching valuation.

Although she praised Airbnb for its “wonderful” customer service team after the incident, EJ also criticised its failure to explain the risks.

“By hindering my ability to research the person who will rent my home, there is an implication that Airbnb.com has already done the research for me,” she wrote. “In effect, the friendly, community-based site … creates a reasonable expectation that some basic screening of its users has occurred, and speaks little to the risks involved.”

Brian Chesky, co-founder and chief executive of Airbnb, said: “I was extremely shocked when I heard about it. We’re working closely with the authorities to bring justice.”

He said that a suspect was already in police custody and that Airbnb was in regular contact with the victim to help her get over the incident.

Apparently Airbnb had already taken steps to improve security. These included doubling the size of its customer support team, setting up a 24-hour telephone hotline, and offering insurance products.

Airbnb’s simple premise has sparked several similar sites in Europe, including 9Flats and Wimdu. Airbnb’s large funding round has been seen as an attempt to build scale quickly outside the US to head off such competition.

Airbnb just joined the billion dollar valuation club, $1.3 billion to be precise, according to the Wall Street Journal. The San Francisco-based apartment-sharing website just closed a $112 million round of financing led by Andreessen-Horowitz, with participation from Yuri Milner’s DST Global and General Catalyst.

The startup, launched in August 2008 by cofounders Nathan Blecharczyk, Brian Chesky and Joe Gebbia, today boasts some impressive stats: more than 2 million nights booked (double that of four months ago), a website attracting 30 million-plus monthly views, and 54 million ‘social connections’ since the May launch of its social hub.

As competition in its category heats up, Airbnb will reportedly use the latest cash infusion to continue expansion from its current 186 countries and “stay in front of the folks trying to emulate the service around the world.”

The company is certainly the darling of VC firms. As Forbes notes,  Andreessen-Horowitz Jeff Jordan wrote in a blog post,

“I joined eBay in 1999, early in its life, and had the privilege of witnessing and contributing to the development of one of the most iconic e-commerce businesses. Airbnb reminds me more of eBay in its early days than any other business I have ever encountered."

His reasoning? Both eBay and Airbnb are, in Jordan's opinion:

• Marketplace models, connecting buyers and sellers
• Community-driven, populated with passionate users who evangelize the service
• Providing economic opportunity and empowerment to their sellers/hosts, enabling them to earn meaningful income
• Platforms upon which their community of users continually expands into new verticals
• Helping to make inefficient commerce efficient.

According to TechCrunch, Andreessen invested $60 million, DST $40 million, $5 million came from General Catalyst, and the remainder from previous investors and Amazon CEO Jeff Bezos.

“Over the past three years, we’ve built a community marketplace for unique properties and brought it into the mainstream and into almost every country on the planet,” stated Airbnb's Chesky at the financing

“Today is a watershed moment — both for Airbnb as a company and for our community — that will enable us to touch new markets and expand our vision to make the world’s most interesting and inspiring places accessible to our users.”

We first covered Airbnb as a disruptive peer-to-peer brand last June, when Jordan commented said that he and the company's cofounders “believe Airbnb is to spaces what eBay is to products.”

Still, its rapid rise hasn't been without controversy. The site has been accused of running "dummy ads" on Craigslist, a practice that an Airbnb spokesman told Fortune was the result of contracted sales reps, adding: "This is not a tactic we condone or endorse, and it is our policy to forbid such actions."

Source for financials: brandchannel

Valere Tjolle: Valere is editor of the Sustainable Tourism Report Suite 2011 Special Offers HERE