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Airbnb made rapid moves over the last few weeks to settle tax challenges with large cities, now they just need to figure out the laws that ban the majority of their short-term rentals.

TPG Capital is close to signing an agreement to invest in room-sharing service Airbnb Inc. at a $10 billion valuation after resolving disagreements over the terms, people with knowledge of the situation said.

The private equity firm was leaning against investing in the San Francisco-based company earlier this week amid debate over the startup’s value and other issues, said the people, who asked not to be identified because the process was private. The talks later progressed and TPG is now close to signing a deal, said the people.

The financing round was competitive and Airbnb is set to raise about $400 million to $500 million, the people said.

The back-and-forth discussions underscore how the fundraising road for hot Silicon Valley startups can hit bumps, even amid a frothy environment for financings. Hedge funds, mutual fund companies and corporate investors have poured money into closely held technology companies.

Owen Blicksilver, an outside spokesman for TPG, declined to comment, as did Kim Rubey, a spokeswoman for Airbnb.

At $10 billion, Airbnb would join the ranks of the most highly valued private U.S. technology companies, which includes Dropbox and Palantir Technologies Inc. It would also be worth more than twice as much as publicly traded vacation-rental site HomeAway Inc.

Airbnb, founded in 2008, lets users rent out a couch, bedroom or house and makes money by charging a fee for each transaction. The company has listings in more than 34,000 cities, according to its website. Airbnb has raised around $326 million from venture-capital firms including Sequoia Capital, Greylock Partners and Founders Fund.

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With assistance from David Carey in New York.

To contact the reporter on this story: Serena Saitto in New York at To contact the editors responsible for this story: Pui-Wing Tam at 

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Tags: airbnb, ipo, sharing