Unlike Uber or Lyft, Airbnb doesn’t have to burn a lot of money to make money.
But credit usually comes cheaply to huge startups with fat valuations and lots of hype, so the home rental service has just raised $1 billion in debt financing from a group of major banks. Bloomberg first reported news of the funding, and a source close to the company confirmed it to Recode.
The banks making the loan include J.P. Morgan, Citigroup, Bank of America and Morgan Stanley, all of whom probably want to underwrite Airbnb’s eventual (and presumably very lucrative) IPO. Airbnb was valued at $25.5 billion in a $1.5 billion funding round last year.
Bloomberg previously reported that Airbnb plans to let users book other travel services (guided tours, restaurant reservations, etc.) sometime later this year, a new revenue stream that this money could help develop.
But what's particularly interesting about the loan is that Airbnb doesn’t appear to need the money. In fact, its business looks a lot more stable than other large unicorns, such as Palantir or Uber.
Airbnb doesn’t have any major competitors, and the primary hurdles to its business are political problems that it will likely overcome in the long run. Bloomberg reports that Airbnb has lost less than $250 million since launching in 2008, and that it generated about $1 billion in revenue last year.
Recent history might be of some help here. In April, the high-flying workplace chat startup Slack raised money at a $3.8 billion valuation. An investor familiar with the company’s plans told Recode at the time that Slack was taking "the opportunity to raise money while they can.”
Airbnb will eventually go public, though not this year, and it’s probably doing the same thing as Slack. Airbnb still has $2 billion in cash, and the new debt funding will give it a cushion as it continues to expand, according to the Bloomberg report.
Startups are increasingly raising money through debt instead of offering equity. Uber just secured $2 billion through loans, and in March of 2012, Facebook secured an $8 billion line of credit from a group of similarly big-name banks. The company went public a couple months later.
A spokesperson for Airbnb declined to comment for this story.
This article originally appeared on Recode.net.