Airbnb Inc. secured a $1 billion debt facility from some of the largest U.S. banks to help the home-sharing company develop new services and fund growth initiatives, people familiar with the matter said.

The debt deal was led by JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. Morgan Stanley also participated, according to the people, who didn’t want to be identified talking about a private transaction.

The financing gives Airbnb more money to spend on global growth strategies and expansion beyond home-sharing. The San Francisco-based company is building add-on travel services, Bloomberg reported in March, and it’s running a TV ad campaign right now, a particularly pricey form of customer acquisition.

While Airbnb hasn’t announced plans for an imminent initial public offering, investment banks often arrange debt facilities for successful private companies in hopes of building relationships to win future business like underwriting an IPO. Facebook got an $8 billion package of financing from a group of banks in 2012, some of which helped take the social network operator public two months later.

Representatives for Bank of America and Citi declined to comment. Representatives for JPMorgan and Morgan Stanley did not immediately respond to requests for comment. A spokesman for Airbnb declined to comment.

Airbnb, last valued at $25.5 billion, has watched Uber Technologies Inc. raise more than $11 billion in cash and debt. That number could climb by at least $1 billion when Uber, worth almost $68 billion, closes its latest debt financing.

Airbnb and Uber are often discussed in the same breath because they were founded within a year of each other and have come to define the on-demand economy. But their spending and fundraising practices are drastically different. Airbnb runs a comparatively low-cost business, while Uber is spending heavily to subsidize growth and battle well-funded rivals.

In the first three quarters of last year, Uber lost $1.7 billion on $1.2 billion in revenue. Airbnb has lost less than $250 million since it started in 2008, and it generated roughly $1 billion in revenue last year, a person familiar with the matter said.

Airbnb also has more than $2 billion in cash and more than $2 billion in customer deposits from booking payments people make to the company, which it passes on to hosts later, a person familiar with the matter said.

Network Effects

Uber faces fierce competition from Didi Chuxing in China, Lyft Inc. in the U.S., Grab in Southeast Asia and Ola in India. Meanwhile, Airbnb has few competitors besides older solutions like HomeAway, Craigslist and the hotel industry.

“Airbnb already has a dominant market position and pretty strong network effects that will let it hold onto that position while Uber is still battling,” said Arun Sundararajan, the author of a new book on the sharing economy.

©2016 Bloomberg L.P.

This article was written by Alex Barinka and Eric Newcomer from Bloomberg and was legally licensed through the NewsCred publisher network.

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Photo Credit: An Airbnb video on Facebook. The short-term rental service just raised an additional $1 billion from U.S. banks. Airbnb