Airbnb's losses doubled year over year in the first quarter to $306 million, as the vacation rental start-up ramps up marketing spend ahead of a possible IPO in 2020, according to a report in The Information.
The company's sales and marketing investments rose 58% year over year to $367 million in the first quarter and marketing spend is expected to come in above the $1.1 billion spent in 2018, The Information said, citing undisclosed financial data. Revenue reportedly grew 31% year over year to $839 million, while expenses climbed 47%.
In a statement, Airbnb said, "We can't comment on the figures, but 2019 is a big investment year in support of our hosts and guests."
Last month, The Wall Street Journal reported Airbnb saw strong growth in total booking value during the first quarter, which could help it lure additional investors. Additionally, Airbnb said in January that it had reached its second straight year of profitability, based on an EBITDA basis, and saw a notable uptick in guest arrivals, which could point toward rapidly accelerating growth.
However, should Airbnb proceed with its plans to go public next year, it'll likely face skepticism from investors who have grown wary of cash-burning companies like Lyft and Uber. The environment forced WeWork, which had seen its IPO valuation dwindle, to postpone its initial public offering and get its financials back on track.
Despite the massive losses, Airbnb has over $3 billion in cash on its balance sheet as of Thursday, according to a source familiar with the company's finances. Airbnb also has a $1 billion line of credit that it hasn't used, the source said.