Sources: Airbnb held informal talks to buy discounted hotel booking app HotelTonight; HotelTonight was valued at $463M in a March 2017 funding round
Context & Ripple Effects
In January 2019, sources told the Wall Street Journal that Airbnb was holding informal talks to buy HotelTonight — and the price being discussed implied a discount to the $463M valuation HotelTonight set in its March 2017 funding round. Two months later the talks became real: Airbnb confirmed it was acquiring HotelTonight outright, and Skift's sourcing put the price at a little more than $400M, split roughly half cash and half stock.
That discount-to-last-round structure has a precedent in Airbnb's own deal history — its earlier pursuit of social payments startup Tilt also priced far below Tilt's peak valuation. The HotelTonight bid matters because it marks Airbnb's first major step into traditional hotel inventory, a pivot from its home-sharing core that it doubled down on weeks later with an investment in Indian hotel startup Oyo.
First-order effects
- HotelTonight's investors and employees are looking at an exit below the company's $463M mark from March 2017 — the same down-round dynamic as Airbnb's earlier Tilt acquisition talks.
- Airbnb gains same-day hotel booking inventory and a mobile-first booking app, extending its supply beyond home listings without building the hotel relationships itself.
Second-order effects
- With HotelTonight under its roof and a $150M-$200M stake in Oyo announced shortly after, Airbnb shifts from marketplace intermediary to direct owner of hotel supply — forcing rival booking platforms to decide whether to match that vertical integration.
- Paying half in stock lets Airbnb conserve cash raised in its massive private rounds while still deploying balance-sheet value, a template for further acquisitions before any listing.
Third-order effects
- If the pattern holds, late-stage consumer startups that raised at 2015-2017 valuations increasingly exit through discounted strategic acquisitions rather than IPOs, with well-capitalized private giants like Airbnb as the natural buyers.
- Airbnb's accumulation of hotel assets points toward a structural convergence of home-sharing and hotel distribution into single multi-format lodging platforms, reshaping how travelers and hoteliers reach inventory.
The trend: Airbnb is assembling a portfolio of discounted lodging assets — HotelTonight, then Oyo — as it converts its private-market war chest into a multi-format travel platform ahead of an eventual public listing.