1/ This week @Airbnb (finally) filed to go public and @RobinhoodApp raised $200M at a $11.2B valuation.

The two companies play in different spaces, but comparing how each has navigated the pandemic reveals some interesting things about tech, markets, and economics.

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Flashback to January/February: Airbnb was already feeling the heat as the virus spread through China, then Asia and Europe – bookings in China fell by 80%, and Europe quickly followed. Airbnb saw the writing on the wall for the U.S., but there was nothing it could do.

Robinhood's Winter was comparatively mild. At the time, @MorganStanley had shocked Wall Street, acquiring @etrade for $13B. Like @CharlesSchwab's $26B acquisition of @TDAmeritrade, the financial services industry was now playing in the Zero Fee World that @RobinhoodApp pioneered.

As everyone recalls, s**t really hit the fan in March as Covid's presence in the U.S. revealed itself. Airbnb guests began cancelling their bookings en masse; the company agreed to refund all cancellations, but this outraged hosts. $250M was set aside to partially refund hosts.

Robinhood's March was also difficult, but for the opposite reason: an overwhelming amount of demand, which crashed Robinhood's app three times in the month's first ten days. Outraged customers and class action lawsuits followed, and cratering stocks posed its own unique threat.

Spring was a season of emergency measures for Airbnb. The company took out $2 billion in loans from #PrivateEquity investors and huge asset managers (e.g. @TRowePrice) in April. Then in May the company laid off 25% of its workforce. The outlook seemed bleak.

Robinhood, meanwhile, was recovering from its app outages and adding hundreds of thousands of news users as retail investors fueled the stock market rally from the March lows. The company raised $280M in May but then in June, the unthinkably tragic happened:

A Robinhood user committed suicide after seeing a huge negative balance on his Robinhood account after dabbling in futures contracts. The event raised a foundational question about Robinhood's entire business model: Should anyone be allowed to easily trade financial instruments?

Venture capitalists, however, weren't deterred, plowing another $320 million into Robinhood in July. The stock market rally continued, and new investors continued to join Robinhood, plowing $$ into bluechip stocks and index funds (and ill-advised bets like the bankrupt @Hertz).

Airbnb's fortunes also turned around in late May/June. As Americans grew restless after months of quarantining and state governments relaxed stay-at-home orders, bookings on the platform suddenly (& somewhat unexpectedly, given the health risks) surged:

“Airbnb saw more nights booked for U.S. listings between May 17 and June 3 than the same period in 2019, and a similar boost in domestic travel globally,” reported @livcarville of @business on June 7th. A 2020 IPO for Airbnb was back on the table. https://bloom.bg/34jorRF 

Which brings us to this week's news: Robinhood achieves decaorn status with its latest funding, and Airbnb is finally pulling the trigger on an IPO. But what do these two companies – and their Covid journeys – tell us about our economy?

1. Tech Companies R More Immune to Covid-19: The Nasdaq exchange has significantly outperformed the S&P 500 and Dow Jones since March, while the largest tech stocks now account for more of the total stock market than ever before. Airbnb and Robinhood are riding the same wave.

2. “Too Big To Fail” Extends to Private Companies: Leading tech companies have become integral to our daily lives & we've accepted their huge market power. A similar phenomenon is taking place in VC land, where the biggest startups can access capital while others struggle.

3. Tech Startup Activity Reflects Economic Inequality: When Airbnb laid of hundreds of employees, its exec team remained multi-millionaires and billionaires. Startups are not inoculated from the economic system in which they’re reared; in fact, they reinforce that system.

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