Summary List Placement
Sonder, the hospitality technology company, announced on Friday that it plans to go public via a SPAC deal with Gores Metropoulos II, a blank-check company sponsored by the private-equity firm The Gores Group and the billionaire Dean Metropoulos.
The deal would value Sonder at $2.2 billion, almost $1 billion more than its June valuation of $1.3 billion, and includes $650 million in total cash proceeds. The SPAC merger also includes a $200 million PIPE investment from Fidelity and funds managed by BlackRock and other firms. The company expects the deal to close in the second half of 2021.
Sonder, founded in 2014, operates short-term rentals out of different types of properties: The company began by operating out of traditional apartments in residential buildings, before expanding to full-building apartment hotels and, more recently, standard hotels. It’s like a hybrid of Airbnb and Hilton, turning apartments into hotel suites.
The announcement follows a grueling year for hospitality. Sonder had to lay off or furlough one-third of its workforce last spring, while some of its highest-profile competitors were forced to shutter (Lyric) or pivot their business models after layoffs (Zeus Living).
Now, Sonder is joining a SPAC wave that’s seen deals surge to record highs this year, though momentum has slowed in recent weeks. It’s joining others in the real-estate tech world, such as WeWork, iBuyer Opendoor, and property-management technology company SmartRent.
The company projects GAAP revenue, a standardized accounting measure, to increase from $116 million last year to almost $4 billion in 2025. Last year, because of the pandemic, it lost almost $198 million, but projects profitability by 2023.
We sat down with Francis Davidson, Sonder’s cofounder and CEO — who founded the company by renting out his college apartment — to discuss the …read more
Source:: Business Insider