Investors Not Overly Concerned by Airbnb Rental Nightmare

Over the past three years, Airbnb has connected more than two million travelers looking for a place to stay in spare bedrooms and unused homes around the world.

Based on that demand, investors wrote checks last week to fuel even more growth. The round, announced earlier this week, totaled a jaw-dropping $112 million, which reportedly valued the company at more than $1 billion.

Already, Airbnb is back in the spotlight over a rental gone really, really wrong.

On June 29, a woman in San Francisco named EJ blogged about how the apartment she rented to someone using Airbnb was completely ransacked and vandalized. Her personal documents were stolen, and ultimately, her identity was, too, during a well-executed raid that lasted for roughly a week while she was on a trip.

They smashed a hole through a locked closet door, and found the passport, cash, credit card and grandmother’s jewelry I had hidden inside. They took my camera, my iPod, an old laptop, and my external backup drive filled with photos, journals… my entire life. They found my birth certificate and social security card, which I believe they photocopied – using the printer/copier I kindly left out for my guests’ use. They rifled through all my drawers, wore my shoes and clothes, and left my clothing crumpled up in a pile of wet, mildewing towels on the closet floor. They found my coupons for Bed Bath & Beyond and used the discount, along with my Mastercard, to shop online.

Her story was disseminated more broadly when her post showed up this morning on Hacker News.

With a massive round like the one Airbnb has raised, there will be considerable pressure to hit aggressive growth targets. But no matter how intense the pressure gets, this is a pretty big reminder that the company must put its customers’ lives and security first before getting one more reservation.

Jeff Jordan, the newest general partner at Andreessen Horowitz, which contributed half of the company’s round, is not overly concerned about the situation.

In an interview today, Jordan told me he was aware of the incident and found it comparable to his days at eBay, where the company was building a marketplace in which two strangers met and exchanged cash for a used item.

“I do know that Airbnb is highly focused on providing a safe environment. It’s not foolproof, but there have been very few cases like this. At eBay, it was about two people who didn’t know each other doing commerce together,” he said. “Both are working really hard to make a safe marketplace. In the Airbnb case, they collect personal information on the host and the guest, which includes payment information — which is a pretty individually specific information.”

Airbnb issued a statement today saying that a suspect in the situation is now in the custody of the San Francisco Police Department.

“We’ve created a marketplace built on trust, transparency and authenticity within our community, and we hold the safety of our community members as our highest priority. The vast majority of our community members genuinely respect and protect each other, but we urge users to be careful and discerning with each other and to hold others accountable through reviews, flagging and our customer service channel. Our hearts go out to our host and we will continue to work with her and with the authorities to make this right,” the statement said.

In this particular case, the host does not blame Airbnb, but questions whether its approach is better than Craigslist, where there’s no sense of security so therefore people are more on guard. She even hints that maybe her situation came about from Airbnb’s fast growth.

She writes: “I can still recognize airbnb.com to be a brilliant concept that fills a much-needed hole in the traveler market, and based on their amazingly kind, caring response and support throughout the past few days, they have proven to me that they are an honest company with pure, good intentions. But I do think theirs was a concept that was executed much too quickly, and that some basic screening and security measures must be instituted as soon as possible, that some basic efforts be made to help prevent this from happening to another unsuspecting host.”

Airbnb answers additional questions about its security policies here.