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What's the ROI of Airbnb's acquisition of Gameplanner.AI?
Today, $ABNB made its first acquisition as a public company. This company is Gameplanner.AI, an AI startup that was founded in 2020 by Adam Cheyer, one of the founders of Siri. Interestingly, $AAPL acquired Siri for more than $200 million. According to Airbnb, this acquisition will accelerate some of Airbnb’s AI projects. Those AI projects could be related to Brian Chesky's travel concierge vision that learns about users over time and enhances their travel experiences. With the company being profitable and having $11 billion in cash and liquid assets as of the end of September, Airbnb has dry powder to acquire struggling startups.
While there are many things Airbnb can do with Gameplanner.AI, let's think of how this AI program can be used to boost booking conversion rates. Using a conservative ROI analysis, let's assume:
- there are 150 million users on the Airbnb platform (source)
- average booking value is $161 per night (source)
- Airbnb gets 5% of the booking value
- Gameplanner.AI increases the conversion rate by 2%
This means Airbnb gets:
- 3 million extra bookings
- $483M in incremental gross booking value
- $24.15M in incremental platform revenue with the 5% fee
- 12.08% annual ROI on Gameplanner.AI
The annual ROI that $ABNB will receive from Gameplanner.AI will grow overtime. While the projected breakeven in Airbnb's acquisition is after 8 years, the breakeven point could come sooner as Gameplanner.AI's capabilities grow during its time at Airbnb. With the conservative analysis I've laid out, the chances of this acquisition providing attractive returns remains high. Also, Airbnb will be acquiring many AI researchers that would otherwise be hard to recruit in the first place due to the fierce competition for AI researchers.
Airbnb shareholders should celebrate the acquisition. The future of Airbnb with this acquisition looks exciting.
TechCrunch
Silicon Valley Buzz: Apple Paid More Than $200 Million For Siri To Get Into Mobile Search | TechCrunch
How much did Apple pay for the acquisition of Siri, the maker of a mobile virtual personal assistant app? Apple won't say, and neither will the company or its investors. I spoke with two Siri board members today, and neither would go near the subject. "I can confirm the transaction has happened, but nothing about the transaction itself or Apple’s plans," says Gary Morgenthaler of Morgenthaler Ventures. "All I can say is we are pleased," says SRI's Norman Winarsky. I even asked Siri's app on my iPhone. It directed me to a nearby Apple Store. But if the buzz in Silicon Valley is correct, Siri's investors have a lot to be pleased about. I've been digging around. Sources I trust with indirect knowledge of the transaction peg it at between $150 million to $250 million, with the strongest rumor being "more than $200 million." Siri's investors put a total of $24 million into the startup, so that would make the exit at least an eight-bagger. Why did Apple pay so much for an iPhone app company? When you look at Siri as an iPhone app with only about a quarter million downloads of its free app, the price seems very expensive. But what Apple really bought was an entry into mobile search.
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