Airbnb finalizes deal to buy social payments startup Tilt
By Katie Roof for TechCrunch
We are told that investors will be getting back about $12 million in cash, but the deal value is tens of millions of dollars higher if you include employee retention packages, which were paid for in cash and stock. Many of Tilt’s San Francisco employees including CEO James Beshara were asked to stay on board, but most of the remote team was not.
Airbnb is obtaining the Tilt assets and will keep the app operational, at least for now. But some sources are characterizing this as more of an acqui-hire, because Airbnb is spending most of the money on retaining the team.
While it’s better than shutting down, this was certainly not the dream outcome that Tilt investors had been hoping for when they invested over $60 million. Andreessen Horowitz, SV Angel and other big Silicon Valley names including Reddit co-founder Alexis Ohanian all made bets that Tilt would be a leader in mobile commerce.
Founded in 2012, Tilt was an early pioneer in peer-to-peer money transfers. It is geared more toward group payments than individual transactions, but in some ways competes with PayPal’s Venmo and Square Cash. It is also used for crowdfunding anything from “activities” to “causes,” which makes it an alternative to fast-growing GoFundMe.
The deal makes sense for Airbnb, because it is gaining top talent in the payments space, an area which could complement trip-booking. Airbnb has already built a big lodging business, but wants to expand its travel offerings.
Airbnb’s VP of product, Joe Zadeh, has provided us with the following statement. “Airbnb and Tilt have a common vision for building community-oriented products that make it easy to bring people together. Tilt’s experience and expertise complement our ongoing efforts to transform the way people travel. By joining forces, we’ll reimagine how groups travel and enhance Trips, our new platform that brings together where you stay, what you do, and the people you meet all in one place.”
Airbnb, which has a valuation of $30 billion, has been using its clout to buy up smaller startups. They recently agreed to buy Luxury Retreats and in the past year have also acquired ChangeCoin and Trip4real. They’ve additionally been making investments in startups like Resy.
Airbnb itself is likely too expensive to be acquired, so there has been a lot of speculation about IPO possibilities. While this is an eventual goal of the company, we are hearing that they are unlikely to go public this year
First appeared at TechCrunch