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Airbnb could run out of cash in one year, even with the $1 billion it just raised, because of how devastating the coronavirus is on its business

Airbnb could run out of cash in one year, even with the $1 billion it just raised, because of how devastating the coronavirus is on its business
Reuters



The $1 billion in cash Airbnb announced Monday that it has raised likely won't last the company very long.




Even before the coronavirus epidemic hit, the travel startup was losing money; thanks to the crisis, its losses and cash burn have likely exploded.




In a worst-case scenario, it might not have enough cash to last a year, despite the new funding.




More likely, thanks in part to some cost cuts, it can extend its life beyond that, but not by much, particularly if the crisis and associated economic downturn linger.




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The $1 billion financing that Airbnb said it secured Monday gives it a vital resource as the coronavirus squeezes its business. But even with the 10-figure cash infusion, the company's long-term survival remains in question so long as the pandemic and the associated economic downturn persist.
Indeed, Airbnb could still run out of cash in as little as a year, depending on how hard its revenue is being hit and how much it's able to control its expenses, according to Business Insider's interpretation of some of the company's financial figures which news organizations have previously reported.
The question of just how much cash Airbnb has and how long that stockpile will last the company has become an urgent one because of the coronavirus pandemic. The outbreak has disrupted the travel industry as a whole, as governments around the world have urged or required citizens to stay home to try to limit the spread of the disease. Those steps have halted economic activity throughout the US and in large parts of the world.
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