Sonder makes Nasdaq debut after SPAC deal closes
Sonder’s CEO called the listing a “historic moment” for the company.
probe 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, co-founder and CEO of Sonder, called the listing a “historic moment” for the company, adding that it “is testament to how we have revolutionized the hospitality industry by reimagining and delivering what the modern traveler demands”.
Sonder’s common stock currently trades on the Nasdaq under the symbol “SOND” at a price of US$8.61. As part of the SPAC deal, Sonder will retain its management team: Davidson will remain as CEO and Sanjay Banker will continue as president and chief financial officer.
The San Francisco-based travel and hospitality technology company has strong Canadian roots.
As part of the agreement, Sonder will secure approximately US$310 million in private equity investment capital (PIPE) and $165 million in deferred draw notes to support its new and existing growth initiatives. The company will also have access to up to $450 million in cash through the Gore Metropoulos II trust account.
Although the travel industry still faces strong headwinds due to COVID-19, Davidson said the company remains “aggressively optimistic about the future of travel,” citing Sonder’s record-breaking second- and third-place performance. quarters of 2021 as proof of the “resilience” of its activity.
Sonder is a travel and hospitality technology company that competes with Airbnb, renting and managing a range of short-term rental units in 10 countries and three continents. The now US-based company has strong Canadian roots.
Sonder was founded in Montreal in 2012 by Martin Pecard, Lucas Pellan and Davidson as Flatbook. Two years later, the company moved its headquarters to San Francisco and incorporated in the United States, seeking international investors. However, in recent years, Sonder has begun to expand its presence in Montreal again.
The startup’s early investors are BDC Capital, Spark Capital, Thayer Ventures, ScaleUP Ventures and Real Ventures.
“The last 2 years have been a rough journey for the hospitality industry and Sonder has not only survived, but also thrived,” said Matt Roberts, partner at ScaleUP Ventures, one of Sonder’s early investors through BDC and later , ScaleUP.
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“This is due to management and staff building a flexible model that has been proven at scale,” Roberts told BetaKit.
The travel and hospitality industry has been hit hard by the ongoing pandemic, which has led many people to cancel, postpone or scale back their travel plans, affecting 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 business of $67.5 million, a 155% year-over-year increase and a 43% increase over Q2 last year.
“In the near term, we are focused on rapid growth, improving our technology, customer experience and operational efficiency,” Davidson wrote in a LinkedIn position on the company’s journey to become publicly listed. “Over the next three to five years, we plan to be truly global with a presence in Latin America and the Asia-Pacific region.”
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Sonder’s SPAC deal was first announced in April 2021. The company was initially looking to raise US$650 million in cash for an enterprise value of $2.2 billion. However, in October, the company reduced its valuation to $1.9 billion given market conditions.
Gores Metropoulos II is a SPAC sponsored by a subsidiary of The Gores Group, a global investment firm based in Beverly Hills. The combined company will operate as Sonder Holdings, while Sonder’s publicly traded common stock and warrants will trade today on the Nasdaq Global Select Market under the ticker symbols “SOND” and “SONDW,” respectively. .
SPAC investors include subsidiaries 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 our business combination completed, Sonder now has a very strong balance sheet to aggressively pursue our ambitious growth strategy,” Banker said.
Feature image courtesy of Sonder