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AirBNB’s Samara

It’s not very often that we see a proptech company IPO. Most publicly traded real estate companies are REITs and management companies. But a number of proptech companies have recently been growing so big that you can’t ignore them. AirBnb is one of the most anticipated IPO’s of 2020, debuting on the Nasdaq sometime later this month under the ticker ABNB. But I’m not excited because it’s a strong brand that’s going public. I’m excited because of what AirBnb wants to do with its subsidiary, Samara.

A Short History of AirBnb’s Impact

Back in 2015, I attended a hotel conference where nobody was willing to admit that AirBnb was siphoning their customers. By 2016, they acknowledged that their occupancy rates were lower. AirBnb’s ‘phantom inventory’ was skewing their numbers. In 2017, every panel discussion mentioned AirBnb, and datasets included both hotel inventory and home sharing inventory. By 2019, 12 years after AirBnb launched, Marriott officially recognized them as a competitor by launching their own home sharing brand.

AirBnb’s IPO isn’t going to be like most public real estate stocks, where you buy a company backed by real estate assets with very predictable cash flows and growth. This is a proptech company with software-like margins that’s already sent waves through the hotel industry AND the housing industry. And they’re aiming for more.

A sudden injection of $3 billion in fresh capital might put a dent in the real estate industry. Of course they’ll use a lot of the IPO funds on growing their core business. The S1 filing outlines where their strategic focus lies: Growing the hosting community and deepening market penetration around the globe.

The last point in their “Long Term Growth Strategy” in the S1 gets me excited:

“We will design new opportunities for connection. As the world continues to change, we will continue to bring together new technologies with our design expertise to expand possibilities for our hosts and offer new experiences for our guests.”

AirBnb’s Moonshot Lab: Samara

On its own, this quote doesn’t mean much, until you dig into the subsidiary that they quietly launched in 2016: Samara. Co-founder Joe Gebbia wasn’t satisfied with the disruption AirBnb has already caused. So he set up a separate team to work on moonshots to make sure they don’t become complacent.

Here’s some of their marketing copy:

“Samara is an experimental product development team at Airbnb.

Airbnb proves that open-mindedness, generosity, and faith in the kindness of strangers can go a long way. Samara is a space for these values to evolve beyond travel and hospitality and into our daily lives.

The journey is long”

I love the last line because they’re focused on long term changes in the real estate industry. Further investigation shows that Samara’s first project was in a small Japanese town called Yoshino. They invested in building a community center dubbed the Yoshino Cedar House as a gathering place for locals to host AirBnb guests for tourism activities.

The result was $75,000 in bookings in the area, which may not sound like much, but to a small town with an aging population, it injects outside capital into the local economy. This is still an ongoing research project in how AirBnb can revitalize smaller economies.

Backyard

But Samara announced a new initiative 2 years ago called Backyard, and Joe Gebbia confirmed that they are exploring how AirBnb can get into architecture and urban planning. They’re researching manufacturing techniques, modular construction, smart home tech, and gathering data from their hosting and guest communities to build small homes and ADU’s.

Other than that, Samara’s initiatives are under pretty tight wraps. My guess is that they want to start off by using new technology to design and build homes and communities that are naturally conducive to flexible living and home sharing. Because that’ll bolster their core business.

I’m sure they’ll further pursue any promising research so that it can grow into its own business as big as AirBnb itself. This most likely means they’ll expand beyond being a software company and start dealing with the bricks and sticks.

AirBnb is looking to become a force behind innovation in real estate. If you’ve been watching any of my proptech videos, they’re investing in a lot of the technology I’ve been talking about. And if you haven’t been watching, go subscribe because I’m constantly sharing my research in proptech for my OWN real estate developments. Stay curious!