Airbnb, the short term home rental site, is reportedly close to closing an almost $1 billion funding round, according to a Wall Street Insider who spoke with Rolfe Winkler and Douglas MacMillan of The Wall Street Journal.

This would value the company at $24 billion, higher than Marriott, the hotel chain conglomerate currently valued at $21 billion. Airbnb representatives cited the company’s dramatic rate of growth in recent years and their plans for further expansion to justify the high valuation. If they secure the funding, it would place Airbnb in the second spot for highest valued start-up, ranking only behind Uber, both companies which epitomize the increasingly popular sharing economy model.

Behind the Numbers

Airbnb representatives told investors that they expect more than $900 million in revenue this year, more than triple their revenue in 2013, which totaled roughly $250 million. Their expected revenue by 2020: a staggering $10 billion.

But these projections assume that the company will take a considerable share of the hospitality industry from the current behemoths: Marriot, Priceline Group, and Expedia Inc. In order to reach these projections, Airbnb would have to grow its current share of the lodging market from 1% to 10%, a considerable feat. In the upcoming years, Airbnb’s growth will rely on not only a considerable increase in homeowners willing to list and rent on their website, but equally on the conversion of travelers to their website in substantial numbers. But Sean Hennessey, industry consultant with Lodging Advisors LLC, states that traveler awareness is still low, and they can reach their targets as the market and awareness both grow.

Legal Woes

Were the ongoing legal battles against Airbnb a consideration when these projections were made? An interesting question, but one left unanswered as of yet.

Unsurprisingly, hotels, both local and global, have voiced widespread displeasure and disapproval of Airbnb. The website not only takes a share of business away from them (likely to only increase), but they are also much less taxed and regulated than the traditional hospitality providers. The listings aren’t subject to local hotel or tourist taxes, and aren’t held to the same safety and fire standards. These factors are a cost of business that hotel providers must endure, while Airbnb and their renters do not.

But the legal troubles don’t stop there. Short term renting of residences itself also violates local laws in various cities around the world, and some municipalities have outright declared Airbnb rentals illegal. Most notably, one of Airbnb’s largest markets: New York City. Last year, the state attorney general generated a report about the extensive illegality of the rentals, citing the unpaid hotel tax and violation of a state law which prohibits rentals of less than 30 days.

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Airbnb removed roughly 2,000 listings in New York City following the release of the report. Also last year, a New York City resident who lived in a rent-controlled apartment and made $61,000 in nine months from renting out three of her four bedrooms on Airbnb was court-ordered to cease doing so immediately. The court found that her landlord had justifiable grounds to evict her.

Barcelona also made a stand against Airbnb by issuing a 30,000 Euro fine on the company for violating their tourism laws. In Berlin, city officials passed a new housing law requiring homeowners to obtain permission from authorities for short term rentals. Other American cities, including Malibu, New Orleans, and Santa Monica have expressed similar concerns.

Airbnb Backers

Not all cities, however, are staunchly opposed to Airbnb’s growing popularity. San Francisco passed a bill legalizing home sharing, but with a few limitations. Hosts must register with the city, pay the hotel tax, carry liability insurance, and cannot rent for more than 90 days per year. Similar bills have been passed in Amsterdam, Hamburg, and France.

Ultimately, the laws hampering Airbnb’s expansion are in place for a good reason: to protect the parties involved and the neighboring community, and maintain safety standards. These legal troubles are bound to be resolved eventually, and the likely solution that many municipalities and states will adopt will be similar to that of San Francisco’s: allowing the rentals with justifiable limits.

Airbnb continues to fight these legal battles, and in their recent projections for the year they estimated an operating loss off $150 million to expand their services and fight regulators globally over taxes and laws. In the expanding sharing economy, in which Forbes cites Airbnb as a pioneer, the projected growth of the company and their recent high valuation is likely reasonable, notwithstanding the difficulties they must continue to battle into the foreseeable future.