Shortly after moving to San Francisco in October 2007, roommates and former schoolmates Brian Chesky and Joe Gebbia could not afford the rent for their loft apartment. Chesky and Gebbia came up with the idea of putting an air mattress in their living room and turning it into a bed and breakfast. The goal at first was just “to make a few bucks”. In February 2008, Nathan Blecharczyk, Chesky’s former roommate, joined as the Chief Technology Officer and the third co-founder of the new venture, called AirBed & Breakfast. They put together a website which offered short-term living quarters, breakfast, and a unique business networking opportunity for those who were unable to book a hotel in the saturated market. The site Airbedandbreakfast.com officially launched on August 11, 2008. The founders had their first customers in town in the summer of 2008, during the Industrial Design Conference held by Industrial Designers Society of America, where travelers had a hard time to find lodging in the city.

To help fund the site, the founders created special edition breakfast cereals, with presidential candidates Barack Obama and John McCain as the inspiration for “Obama O’s” and “Cap’n McCains”. In two months, 800 boxes of cereal were sold at $40 each, which generated more than $30,000 for the company’s incubation. It also got the company noticed by computer programmer Paul Graham, who invited the founders to the January 2009 winter training session of his prestigious startup incubator, Y Combinator, which provided them with training and $20,000 in funding in exchange for a small interest in the company. With the website already built, they used the $20,000 Y-Combinator investment to fly to New York City to meet users and promote the site. They returned to San Francisco with a profitable business model to present to West Coast investors. By March 2009, the site had 10,000 users and 2,500 listings.

In March 2009, the name of the company was changed to Airbnb.com, and the site’s content had expanded from air beds and shared spaces to a variety of properties including entire homes and apartments, private rooms, castles, boats, manors, tree houses, tipis, igloos, private islands and other properties.

One year later, there were 15 people working from Chesky and Gebbia’s loft apartment on Rausch Street in San Francisco. To make room for employees, Brian Chesky gave up his bedroom and lived at lodging booked via the Airbnb service until the company moved into its first office space., and in April 2009, the company received $600,000 in seed money from Sequoia Capital. In November 2010, the company raised $7.2 million in financing from Greylock Partners and again from Sequoia Capital in a Series A round and announced that out of 700,000 nights booked, 80% had occurred in the past six months.

In February 2011, Airbnb announced its 1 millionth booking since its inception in August 2008. In January 2012, the company announced its 5 millionth night booked internationally. In June 2012, Airbnb announced 10 million nights booked, doubling business in the previous 5 months. Of these bookings, 75% of the business came from markets outside of the continental United States.

On May 25, 2011, actor and partner at A-Grade Investments Ashton Kutcher announced a significant investment in the company and his role as a strategic brand advisor for the company.

In May 2011, Airbnb acquired a German competitor, Accoleo. This takeover, as well as other similar acquisitions, launched the first international Airbnb office, in Hamburg. In October 2011, Airbnb established its second international office in London. Due to the growth of international users, in early 2012, Airbnb opened offices in Paris, Milan, Barcelona, Copenhagen, Moscow, and São Paulo. These openings were in addition to existing offices in San Francisco, London, Hamburg, and Berlin. Airbnb announced in September 2013 that its European headquarters would be located in Dublin. Prior to the 2012 Summer Olympics, Airbnb acquired London-based rival CrashPadder, subsequently adding 6,000 international listings to its existing inventory. This acquisition made Airbnb the largest lodging website in the United Kingdom.

In November 2012, in the aftermath of Hurricane Sandy, Airbnb partnered with New York City Mayor Michael Bloomberg to offer free housing for persons displaced by the storm. Airbnb built a microsite for this effort alone where victims register for housing and meet property owners with free housing. Additionally, Airbnb waived all service fees associated with these listings while maintaining the Host Guarantee for all properties listed.

In November 2012, Airbnb opened an office in Sydney, Australia, its 11th office location, and announced plans to launch the service in Thailand and Indonesia, At that time, Australian consumers accounted for 10% of the Airbnb user base. and in December that same year, Airbnb announced its strategy to move more aggressively into the Asian market with the launch of an office in Singapore.

In November 2012, Airbnb acquired NabeWise, a city guide that aggregates curated information for specified locations. The acquisition shifted the company focus toward offering hyperlocal recommendations to travelers. In December 2012, Airbnb announced the acquisition of Localmind. Localmind is a location-based question and answer platform that allows users to post questions about specific locations online. These questions are then answered in real-time by experts on the specified territories.

By October 2013, Airbnb had served 9 million guests since its founding in August 2008, and in December 2013, the company reported it had over 6 million new guests in 2013, and nearly 250,000 properties were added in 2013.

In July 2014, Airbnb revealed design revisions to the site and mobile app and introduced a new logo. Some considered the new logo to be visually similar to genitalia, but a consumer survey by Survata showed only a minority of respondents thought this was the case.

In April 2015, following the Obama administration’s easing of restrictions on U.S. businesses to operate in Cuba, Airbnb expanded to Cuba, making it one of the first U.S. companies to do so.

In June 2015, Airbnb sponsored the Manor F1 Team and the Airbnb logo appeared on the front nose of the cars and on team wear including the drivers’ overalls.

In August 2015, Airbnb partnered with Tesla Motors to provide chargers at certain host houses, first in California.

In the summer of 2016, the Federal Trade Commission started investigating how Airbnb affected housing costs per the request from three US senators. In October that same year, New York Gov. signed a bill charging Airbnb fines for violations of local housing laws. The New York Times reported that these events were related and part of a “plan that the hotel association started in early 2016 to thwart Airbnb”.

In January 2017, Brian Chesky, CEO of Airbnb, tweeted that the company will give free housing to refugees and any others not allowed into the United States as a result of Donald Trump’s Executive Order 13769, which temporarily banned refugees from the United States. AirBnB also led an investment in reservation-booking app, Resy, along with serial entrepreneurs Gary Vaynerchuk, Ben Leventhal and Mike Montero.

Airbnb first became profitable during the second half of 2016. Airbnb’s revenue grew more than 80% from 2015 to 2016.

In February 2017, Airbnb acquired Luxury Retreats International, a Canadian-based villa rental company, in its largest acquisition to date.