Francis Davidson, the CEO and co-founder of Canadian-founded and San Francisco-based alternative lodging company Sonder Holdings, is stepping away from the company after working on spearheading its integration with hotel giant Marriott International since August.
Davidson had been leading the company while navigating multiple challenges in its push to become profitable, including accounting issues, lawsuits, and layoffs in the post-COVID-19 hospitality landscape.
“I still thought of myself as an entrepreneur, but the reality was that … I was a turnaround CEO.”
Francis Davidson
The company ultimately landed on a 20-year strategic licensing agreement with Marriott and $146 million USD (then $198 million CAD) in additional liquidity from various investors to strengthen its balance sheet.
In a longform post on X, Davidson said orchestrating the deal was “the hardest thing” he’d ever done.
“After nearly a year of replatforming our technology, we announced earlier this week that our integration with Marriott is now complete,” Davidson wrote. “This positive momentum and major milestone felt like the right moment for a leadership change.”
Through the licensing deal, Sonder’s inventory will join Marriott’s portfolio under the “Sonder by Marriott Bonvoy” banner, and Sonder will pay royalties to Marriott in exchange for making its units bookable through the hotelier’s website and loyalty program.
Sonder was founded in Montréal in 2012 by Martin Pecard, Lucas Pellan, and Davidson under the name Flatbook, but later moved its headquarters and incorporated in the United States. Davidson recalled the company’s early and rapid growth as a startup in his X post, but said that revenues collapsed, and burn shot up, when the COVID-19 pandemic hit.
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“I still thought of myself as an entrepreneur but the reality was that, for those years, I was a turnaround CEO,” Davidson said.
Though travel demand rebounded, Sonder struggled after going public in early 2022 at a $1.9-billion USD valuation via a special purpose acquisition company. The company saw its stock price on the Nasdaq nosedive from roughly $200 USD per share to less than $2 USD.
Davidson believed that going public seemed like a great idea at the time, but by early 2022 the market had shifted and the company raised approximately $400 million less than it had planned while still dealing with the costs of a public company.
“Low volume and an increasingly depressed stock price made it practically impossible for institutional capital to build a position in the stock,” he said in the post.
Davidson said he learned the company could be “so much leaner and more effective” than he thought possible, but a standalone company could only do so much, leading to exploring partnerships with major hospitality companies such as Marriott.
According to a US Securities and Exchange Commission [SEC] filing, Davidson is stepping down as CEO and director, replaced in an interim capacity by board chairperson Janice Sears. Sears has been on Sonder’s board since 2022, according to the filing.
Davidson said in his post that his next steps will be to reflect on the past decade, his learnings and explore new ideas.
“After all, I always identified more with the “co-founder” part of my title than whatever came next,” he said.
Feature image courtesy of Sonder.