why not IPO? I mean I think going public is terrifying and awful, but have to exit sometime right? if you raise at >$10B you would need to IPO at >$20B no?
I would think they need to sort out the lingering legal issues. You don't want to get into the area of "I raised money from public investors to run an illegal business". That's a jail time kind of offense. I'm not saying airbnb is illegal, but if the US courts turned on them I imagine it might get scary for the board and execs.
Though there are drawbacks, I think there's a real good argument for AirBnB specifically to IPO. They would get a whole lot more stakeholders with skin in the game on their side. This will help in their ongoing public relations and regulatory battles.
Being a publicly traded company sucks. I imagine a lot of this financing will go to cash out early investors, providing liquidity for those who need it, while still keeping the company private.
It's a common strategy with tech companies. (See Square, Uber, Dropbox, Twitter, etc.) The first major instance I remember was the $300MM DST/Yuri investment in Facebook in 2009.
It's easier to get a high valuation in a private round as the terms could be very favorable to investors: like 3x pref liquidation, etc. You don't need to sell the company for more than the valuation for the investors to make money. In fact they could even make money even if the company is sold for much less than the round's valuation. The only ones who are screwed are employees with common shares.
Also, you can't short a private company, at least in the usual ways.