Airbnb is nearing a deal to buy Venmo-competitor Tilt, said two people briefed on the discussion, for a price said to be between $10 million and $20 million. The deal would be a stunning comedown for a company that has raised a total of $62 million in equity, at a reported valuation most recently of $400 million.
But Airbnb is buying Tilt for its expertise in payments rather than its ongoing business. Tilt created an app which lets groups of friends split the cost of trips or crowdfund a large purchase. While the app likely will be folded, the technology behind it appears to be what interested Airbnb.
Airbnb is looking to bolster its payments operation with a potential acquisition of Tilt. The deal could help Airbnb’s international expansion hopes.
Airbnb CEO Brian Chesky tweeted last month in response to a customer request that the company was looking to create more flexible ways for groups of friends to pay through its app. He gave Tilt a shout out in the thread, which also looped in Tilt CEO James Beshara. Tilt’s backers include Airbnb board member and Andreessen Horowitz general partner Jeff Jordan.
Many Tilt employees will likely be offered positions, two people said. Airbnb will pay retention packages to keep executives and employees, raising the overall cost of the deal slightly.
Tilt began in 2012 as a crowdfunding platform that let users raise money from their close friends or social connections. It charged a 2.5% fee on the amount raised. “They can process payments cross currency, which is not easy to do. It’s a lot of engineering and a lot of dedication to payments,” said a Tilt investor, who wasn’t aware of the deal.
But it’s unclear how the company was performing financially. Tilt’s number of monthly active users fell by 32% over the last three months, according to Apptopia.
The company last raised a $25 million Series B in 2015. It has been making an international expansion of its peer-to-peer payments, trying to take advantage of rival Venmo’s U.S.-centric approach. Airbnb, meanwhile, is trying to expand internationally, particularly in Asia and Latin America. It’s recently adapted its payments procedures for those regions, including allowing Brazilians without credit cards to pay in person through their bank or ATM.
Tilt began in 2012 as a crowdfunding platform that let users raise money from their close friends or social connections.
Airbnb announced in November that it wants to be the hub for people’s entire travel plans, giving people the chance to book unconventional tours of neighborhoods and hand-curated restaurants. It also teased that it would allow people to book flights eventually.
“Similar to the manner in which PayPal was critical to eBay’s success as the first global online marketplace, payments at Airbnb is critical to Airbnb’s growth as a global platform for travel,” Airbnb employees wrote in a blog post last fall.
Sitting on plenty of cash, Airbnb has started to ramp up its corporate development efforts, including an investment in restaurant-booking app Resy. Both Airbnb’s payments operation and its corporate development efforts report up to CFO Laurence Tosi.
Tilt has several ties with Airbnb, even aside from Mr. Jordan. Both companies also started in the startup incubator Y Combinator, and their offices in San Francisco’s South of Market neighborhood are about five blocks apart.