It's a simple idea: Set up a clearinghouse for people to informally "rent" out their homes, or rooms in their homes, to travelers. But it wasn't until 2009 that a group of San Francisco entrepreneurs tried to base a business on this idea, launching a website, Airbnb, that connects people with space to rent and visitors disinclined to stay in a hotel.
Last year, Airbnb's prospects seemed uncertain. But that's changing fast. Yesterday the company, still based in San Francisco, announced it has raised $112 million in venture funding. More than half of that was contributed by Menlo Park-based venture fund Andreessen Horowitz, which seems quite bullish on the company. As Andreessen's general partner, Jeff Jordan, put it in a blog post:
The Airbnb service quickly struck an extremely powerful chord with consumers. Growth has been flat-out explosive, with over 2 million room nights already booked. The site now features spaces in 186 countries and over 16,000 cities around the world. Hosts can earn substantial sums of money -- one has even used Airbnb earnings to pay off his mortgage -- and their community of users is passionate about the service, enjoying the social aspects of Airbnb travel.