San Francisco-based and Montréal-founded travel tech startup Sonder is looking to grow the company’s presence in its hometown.
Founded in 2012, Sonder got its start in Montréal under the name Flatbook. Two years later, Sonder moved its headquarters to San Francisco and incorporated in the United States, in the pursuit of international investors.
Now, Sonder has a renewed focus on Canada, including plans to open a second headquarters in a major Canadian city.
Sonder has yet to make an official announcement regarding its second headquarters. “No decision has been made,” a spokesperson for Sonder recently told BetaKit, noting that conversations are still ongoing.
“We’d love for Montréal to have a bigger place within Sonder.”
— Martin Picard, Sonder
However, all signs point to Montréal, where Sonder has ramped up activity over the last year. In recent months, Sonder has upped hiring in the city and has pursued talks with the Government of Québec about expanding its presence in the region. A source familiar with Sonder’s operations told BetaKit the company has effectively chosen Montréal for its second headquarters.
Update: On December 16, Sonder announced it had reached a deal with the Québec government to open a “hub office” in Montréal. The deal includes a $30 million CAD loan agreement with the Québec government through Investissement Québec, and plans to bring on as many as 700 employees over five years, in addition to its existing staff in the city.
The commitment to Montréal is punctuated by the new addition of Manon Brouillette, a veteran of the Montréal tech sector, to Sonder’s board of directors.
Brouillette, who served as the CEO of Montréal-based Videotron until January 2019 and has held roles at Cirque du Soleil Entertainment Group, brings extensive knowledge of the Québec business world. A Sonder spokesperson told BetaKit that Brouillette’s appointment demonstrates the company’s commitment to Montréal.
The addition of Brouillette follows a substantial $170 million Series E round raised by Sonder after facing the harsh impact of COVID-19 on the travel sector, which caused the company to lay off 282 (22 percent) of its workforce and furlough an additional 11 percent of 1,254 workers in March. Now, Sonder is back in hiring mode, with a significant number of job postings in Montréal, as well as its other global offices.
Sonder’s CEO Francis Davidson founded the company while he was a student at McGill University. The company offers a platform that manages short-term rentals in North America and Europe. Sonder seeks to sign multi-year leases in residential buildings and rents rooms out to travellers or business travellers, either through direct bookings or on OTAs or other booking sites.
“We’d love for Montréal to have a bigger place within Sonder,” Martin Picard, co-founder and global head of real estate at Sonder, told BetaKit.
“Today we’ve established ourselves as a bigger player, and we have those ties with investors on a global scale, so we think it’s the right time to think about where we can have a second location,” Picard said, regarding the decision to open the Canadian headquarters.
“We’re still discussing with the government what that can look like,” he added. “We think that there’s a really meaningful partnership that can happen on those ends.”
Sonder first stated plans to open a second headquarters in Canada after achieving unicorn status following a $210 million USD Series D round in July 2019, for which the company gave up its Canadian tax status. Potential cities for the new headquarters included Vancouver, Toronto, and Montréal.
Sonder has undoubtedly ramped up activity in Montréal over the last year. In March, co-founder Picard relocated to Montréal from San Francisco.
“We’re super excited about being able to tap into the Montréal market and go back to some of our roots.”
In addition to the appointment of Brouillette, Sonder is also set to announce the opening of a new hotel in Montréal’s Plateau Mont-Royal neighbourhood, called Sonder at Guerin Lofts. The company has also become a member of the Association hôtellerie Québec and The Association des hôtels du Grand Montréal.
Sonder has also hired more employees in Montréal than in other Canadian cities over the last six months, according to Picard.
The source who spoke with BetaKit said that following the move of its headquarters to San Francisco, Sonder did not close its Montréal operations but “de-prioritized” them. The number of Montréal-based employees decreased to between 20 and 30 employees in the city, the source said.
Now, of the 155 Sonder employees based in Canada, 140, or approximately 90 percent, are now in Montréal. Picard told BetaKit the company plans to grow that number.
Picard did not provide specific figures indicating the number of employees Sonder was looking to add in Montréal, but noted the company would want it to be a “meaningful presence” and a “material step up” from the current headcount.
The source with knowledge of Sonder’s operations noted the company opted for Montréal as part of plans to expand its European footprint. The source said the company would have an easier time doing so in Montréal, which would serve as a midpoint between Europe and San Francisco, which are in vastly different time zones. Another benefit to Montréal is its low cost of living compared to San Francisco.
The source added that Inovia, which participated in Sonder’s Series D and E rounds, has played a role in helping the company move back to Canada, specifically helping Sonder secure government funding and tax credits (Inovia has received funding from Caisse de dépôt et placement du Québec as well as Investissement Québec).
Picard said in addition to Montréal’s large tech talent pool, Sonder also sees a cultural significance in having a strong Montréal presence, due to its historical attachment to the city.
“We know what the city has to offer, we’ve experienced this firsthand,” he said. “We’re trying to iron out some of the details and see if we can reach an agreement with [the government], but we’re super excited about being able to tap into the Montréal market and go back to some of our roots.”
“The first step is nailing down: is Montréal the right place?” Picard added. “If it is, and we hope it is, then what’s the scope that we’re talking about?”
UPDATE 17/12/20: This article has been updated to reflect that Sonder officially announced plans to expand its presence in Montréal.