Why Airbnb's new round of funding worth $100M is a big deal

If you think that Airbnb was ever just a flash in the pan, think again.

According to the The Wall Street Journal, Airbnb has reportedly closed yet another round of funding, this time for $100 million in fresh capital--bringing its total to some $2.4 billion. Airbnb—a privately held company-- reportedly made $340 million of revenue and booked 23.8 million nights in the third quarter.

While Airbnb has about 1 percent market share, which is small compared to traditional hotels, its low overhead and a loose patch work of regulations has some in the industry scrambling for ways to compete.

Last week's announcement by Marriott International to acquire Starwood International not only was a move to create the world's largest lodging company, it was also seen as an anti-Airbnb defensive maneuver.

In April, real estate investor Thomas Barrack said at a conference that Airbnb is “killing” the hospitality business because it doesn’t own properties and is not responsible for services like housekeeping. Also, it allows travelers to get cheaper accommodations along with an option to sublet the house.

Other companies, like Expedia --which has been on a buying spree lately-- are also looking to compete with Airbnb.

Expedia, which helps hotels rent out rooms and provides similar services for other businesses, bought out Travelocity in January for $280 million and earlier this month announced it was purchasing HomeAway for $3.9 billion as it moves into the sharing economy.

Dara Khosrowshahi, CEO of Expedia Inc., told Skift that the battles between Expedia and Airbnb will become increasingly head-on-head over the next few years.

“I would say from the start to the next two to three years, we’re [Expedia-HomeAway and Airbnb] going to be working in parallel with similar solutions, but in different markets,” Khosrowshahi said. “I think in three to five years, we will increasingly move into the urban space. And certainly Hotels.com, Expedia, Orbitz, and Travelocity bring a lot more urban demand, and I think we’ll take advantage of that urban demand to build up Homeaway’s supply in those urban destinations. Then you are going to get competition. Direct competition.”

Meanwhile, Airbnb has been looking to expand its services in different areas, including the $292 billion business travel market.  Earlier this month, Airbnb announced a new service that tries to lure more corporate users with new feature that singles out the available short-term rentals that have amenities necessary for the business traveler, like wireless Internet and ironing boards.

But Airbnb still struggles with trust and safety issues that has kept it in the spotlight as it manages to avoid many of the rules and regulations traditional lodgings must comply with.

However, the company is trying to change that negative image and has pledged to pay its “fair share” of hotel and tourist taxes in cities that have them –or has been forced to by legislators--and promises to work with municipalities, including sharing anonymized data on the hosts and guests who use the service, preventing illegal hotel landlords.

The company also said it would use its political clout to help establish pro-home sharing policies in cities worldwide by creating home-sharing clubs across the U.S. and internationally, creating an army of supporters to take on future political battles that could threaten its scope.

Whether this will be enough to silence detractors is still unknown. But what's clear is that Airbnb is changing the industry  -- and its $100 million of cash will only help it push the company in directions it wants to go.