Sonder began trading on the Nasdaq this morning, after completing its previously announced business combination with Gores Metropoulos II, a California-based special purpose acquisition company (SPAC).
Francis Davidson, Sonder’s co-founder and CEO, called the listing “a historic moment” for the company, adding that it is “a testament to how we’ve revolutionized the hospitality industry by reimagining and delivering what the modern traveler demands.”
Sonder’s common shares are currently trading on the Nasdaq under the symbol ‘SOND,’ at a price of $8.61 USD. As part of the SPAC deal, Sonder will retain its management team: Davidson will stay on as CEO, and Sanjay Banker will continue to serve as president and CFO.
The San Francisco-based travel tech and hospitality company has strong Canadian roots.
As part of the deal, Sonder will secure approximately $310 million USD in private investment in public equity (PIPE) capital and $165 million in delayed draw notes to support its new and existing growth initiatives. The company will also have access to up to $450 million in cash through Gore Metropoulos II’s trust account.
Although the travel sector still faces strong headwinds due to COVID-19, Davidson said the company remains “aggressively optimistic on the future of travel,” citing Sonder’s record Q2 and Q3 2021 performance as evidence of the “resiliency” of its business.
Sonder is a travel tech and hospitality firm that competes with Airbnb, leasing and managing an array of short-term rental units across 10 countries and three continents. The now United States-based company has strong Canadian roots.
Sonder was founded in Montréal in 2012 by Martin Pecard, Lucas Pellan, and Davidson under the name Flatbook. Two years later, the firm moved its headquarters to San Francisco and incorporated in the US, in pursuit of international investors. However, over the last couple of years, Sonder has begun to expand its presence in Montréal once more.
The startup’s early investors include BDC Capital, Spark Capital, Thayer Ventures, ScaleUP Ventures, and Real Ventures.
“The past 2 years have been a hard journey for the hospitality industry and Sonder not only survived—they thrived,” said ScaleUP Ventures Partner Matt Roberts, an early investor in Sonder through both BDC and later, ScaleUP.
“That’s due to the leadership and staff who built a flexible model that’s been proven at scale,” Roberts told BetaKit.
The travel and hospitality industry has been hit hard by the ongoing pandemic, which has led many to cancel, postpone, or scale down their travel plans, impacting both traditional hotels and tech companies like Sonder and Airbnb.
Amid a rebound in leisure travel demand, Sonder reported record quarterly revenue and year-over-year (YoY) growth in the third quarter of 2021, with revenue of $67.5 million—a 155 percent YoY increase, and a 43 percent increase compared to Q2 of last year.
“In the short-run, we’re focused on rapidly growing, improving our technology, guest experience and operational efficiency,” wrote Davidson in a LinkedIn post about the company’s journey to becoming publicly-traded. “In the next three to five years, we expect to be truly global with presence in Latin America and the Asia-Pacific region.”
Sonder’s SPAC deal was first announced in April 2021. The company initially sought to raise $650 million USD in cash proceeds at an enterprise value of $2.2 billion. However, in October, the firm scaled down its valuation to $1.9 billion in light of market conditions.
Gores Metropoulos II is a SPAC sponsored by an affiliate of The Gores Group, a Beverly Hills-based global investment firm. The combined company will operate as Sonder Holdings, while Sonder’s common stock and publicly traded warrants will trade on the Nasdaq Global Select Market today under the ticker symbols ‘SOND’ and ‘SONDW,’ respectively.
The SPAC’s investors include affiliates of Gores Metropoulos II, Fidelity Management & Research, funds and accounts managed by BlackRock Subsidiaries, Atreides Management, and Senator Investment Group.
“With the Gores team and with our business combination completed, Sonder now has a very strong balance sheet to aggressively pursue our ambitious growth strategy,” said Banker.
Feature image courtesy of Sonder