Airbnb CFO Quit After He Didn’t Get Strategy Role; Some Investors Have Questions

By Greg Bensinger, Maureen Farrell and Rolfe Winkler
Feb. 2, 2018 3:28 p.m. ET
2 COMMENTS
Airbnb Inc.’s finance chief’s decision to leave came after he was passed over for a different role at the home-sharing company and disagreed with co-founder and chief executive Brian Chesky about Airbnb’s future, people familiar with the matter said.

Laurence Tosi, who joined Airbnb as CFO in 2015, had recently sought to take a more strategic position at the company after a widely-expected initial public offering, some of the people said. He decided to leave when it became clear this week that he wasn’t going to get such a role, they said.

Instead, Airbnb on Thursday named Belinda Johnson, its chief business affairs and legal officer, to the newly created role of chief operating officer.

An investor in Airbnb, Reid Hoffman of Greylock Partners, praised Ms. Johnson’s appointment in an emailed statement. “Belinda Johnson is a great choice to help Airbnb continue to scale and achieve its aspirations,” he said. Another investor, Ron Conway, offered similar accolades in a statement, saying, “I could not be happier about her being named COO.”

The appointment of an operations chief triggered a provision in Mr. Tosi’s contract that accelerated vesting of his options, according to people familiar with the matter, making his decision to depart easier.

The executive shake-up is raising questions among investors and others about how much progress Airbnb has made toward an IPO, people familiar with the matter said. Mr. Chesky said Thursday an IPO wouldn’t happen until 2019 at the earliest.

Mr. Tosi had pushed for Airbnb to go public this year, which Mr. Chesky resisted, people familiar with the matter said. The two men also disagreed about aspects of Airbnb’s culture, the people said.

Such clashes are common in Silicon Valley, where entrepreneurs with grand product visions can be rewarded with huge pay packages and funding rounds at high valuations, even as they fail to tend to financial measures, like maximizing profitability, that appeal to investors. Mr. Chesky left some Airbnb backers bewildered last week when he laid out a vision, in an open letter, of what he called an “infinite time horizon” for Airbnb.

Many investors pumped money into Airbnb in recent years expecting the company to go public within a short time frame. After the news of Mr. Tosi’s departure, some investors privately expressed worry that the IPO would be pushed out further into the future, delaying their ability to recoup investments in what will likely be a sizable tech IPO.

Airbnb was valued at $31 billion in its most-recent funding round. An IPO also is important for employees of the 10-year-old company, who might be limited in how many of their shares they could otherwise sell.

Investors and others saw the hiring of Mr. Tosi as a coup for Airbnb. He was previously the CFO of Blackstone Group, one of the world’s biggest asset managers.

At Airbnb, Mr. Tosi often served as some investors’ main point of contact, people familiar with the matter said. Many saw in Mr. Tosi an experienced executive who could counterbalance the company’s young, innovative founder while providing the financial discipline to guide the company through an IPO and beyond, the people said.

By contrast, Ms. Johnson, a former general counsel at Yahoo Inc. and current director of PayPal Holdings Inc., is new to an operational role, which has unnerved some investors, according to the people familiar with the matter.

Mr. Tosi’s tenure was marked largely by fundraising and expansion into new geographic markets. He also helped close Airbnb’s 2017 acquisition of Luxury Retreats, a high-end rental site, for about $300 million.

Airbnb has recently been expanding beyond its main business of connecting travelers primarily with private homeowners willing to rent dwellings for short periods. The company now offers a variety of services like city tours and pottery classes as well as restaurant reservations. Last year, it earned about $100 million in operating income, a person familiar with the matter said.

“The time is right for me to build my own business,” Mr. Tosi wrote Thursday in an email to his staff that was reviewed by The Wall Street Journal. “I am confident that you all will continue to create value for Airbnb and our community.”

Mr. Tosi will leave at month’s end to work on his investment fund.