(Image Source: Airbnb.com)

BY: MEGAN NOE

One of the hottest sites on the Internet lets travelers rent rooms-- or boats, tree houses, parking spaces, and even the country of Liechtenstein. And now, it boasts a new $1.3 billion valuation.

“This place isn’t mine, but I’m staying here for the weekend. It’s not a hotel, and I’d never met my host before yesterday. So how did I end up here? I booked it on Airbnb.” (YouTube)

The peer-to-peer site matches people looking for a place to stay with others renting out their homes. It’s free to list your place, and travelers can use the site to search locations, dates, prices and post reviews.

On Monday, the company announced a massive $112 million second round of investment -- with plenty of venture firms wanting a piece, Signal News reports.

“Airbnb has been a darling of the tech startup community, winning the ‘Breakout App’ award at South By Southwest this year. In a recent benchmark, the site booked more than 2 million nights in four months. It is often called the eBay of room rentals." 

The three-year-old San Francisco startup plans to use the money for global expansion -- particularly in Europe and Brazil. And The New York Times says hotel owners are likely unhappy with the competition, especially from renters not required to pay lodging taxes or meet safety requirements.

“The laws around these kinds of rentals are complicated and murky, housing officials and specialists in real estate law say. Leases vary from place to place. In New York, opportunistic brokers have been seeding Airbnb with multiple properties that they own or lease and filling them with a revolving door of travelers. The city passed a law in May meant to curb such behavior." 

But a Forbes blogger says Airbnb’s valuation reveals a lot about business models in the new economy.

“AirBnB has more than replicated the hotel sector in cities like New York, due no doubt to the depth of the recession. It and Couchsurfing are showing us that old economic models are extraordinarily vulnerable and that recession plays are changing the landscape in dramatic ways." 

So will Airbnb be the next big thing? Or is the site simply riding a surge of interest in web ventures? FT says it’s too early to tell.

“A number of technology start-ups are being flooded with funding and receiving sky-high valuations, causing many analysts to speculate about another Internet bubble."