Airbnb to buy Trooly

Airbnb Inc. is purchasing background check startup Trooly Inc. in an effort to protect its guests and hosts from bad actors. Los Altos, California based Trooly has been helping Airbnb authenticate user identities since 2015. By analyzing data from public records, social media and other sources, Trooly technology could help Airbnb track various customer violations, such as side deals between guests and hosts.

Since starting in 2008, Airbnb has struggled to control fraudulent listings from people posing as property owners. Some Airbnb guests have also been found to sidestep the company by finding an attractive listing on Airbnb website, then contacting the hosts—usually via social media—and offering to pay them directly. Airbnb takes as much as a 12% fee from its guests. Hosts are charged a 3% fee on listings that are booked. In most cases, the company is also required to charge guests a local tax, usually 3 percent, though the tax rates vary by city, state and country.

Trooly was started in 2014, but waited until last year to raise $10 million in its first round of financing, led by Bain Capital Ventures and Milliways Ventures. Airbnb is purchasing Trooly intellectual property and engineering team, according to people familiar with the situation. The home-rental site is expected to close the deal on Monday when Trooly will shut down operations as an independent company, said the people, who asked not to be identified because the information is private.

The acquisition comes at a time of expansion for Airbnb. The privately held company, valued at about $31 billion, has more than 3 million home and apartment-rental listings and is expanding into new product categories including travel “experiences.” In February, Airbnb purchased Canadian property management company Luxury Retreats. San Francisco-based Airbnb turned a profit for the first time in the second half of 2016.