(TAN): Global home-sharing platform Airbnb has had discussions with current investors about distributing a convertible note, a Bloomberg report said.
A convertible note is a form of short-term debt that converts into equity, during a future financing round. In operation, an investor would loan money to a startup, and instead of a return in the form of principal and interest, they would get equity in the company.
The San Francisco-based company reportedly had plans to go public this year. However, uncertainty crept in after the coronavirus pandemic hit, and now the company is weighing the potential debt and looking for avenues to get out of the crisis, the report said.
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The possible terms or size of the note is reportedly unknown. According to the report, Airbnb could increase its present borrowing capacity to gather funds.
Airbnb had credit line worth USD 1 billion and USD 2 billion of cash earlier this year, while it met its bankers to request an extension of the line of credit, as per reports.
Potential investors comprising venture capitalists, private equity firms and sovereign wealth funds have reportedly approached the home-sharing company for probable investments, although none of them decided on a price for the startup.
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While Airbnb was reportedly in favour of listing its shares directly for trading on the market this year, it could eventually take the traditional route of initial public offering to raise funds.
The company is reportedly giving USD 250 million to its hosts who faced losses owing to cancellations triggered by the pandemic.
Hosts on its platform are offering National Health Service staff and other medical workers free places to stay in the United Kingdom while Airbnb is waiving all fees for the stays. The company also announced a new global initiative to help provide housing to 100,000 healthcare professionals, relief workers, and first responders to the coronavirus pandemic around the world.
