US: Next-generation lodging firm Sonder will officially debut on the public markets today (19 January) after announcing the closure of its delayed business combination with special purpose acquisition company (SPAC) Gores Metropoulos II.
The business combination was approved at a special meeting of Gores Metropoulos II stockholders on Friday, and the combined company, operating as Sonder Holdings Inc, will list on the Nasdaq Global Select Market under the ticker symbols “SOND” and “SONDW” respectively from today.
In the process, Sonder has raised approximately $310 million in PIPE (private investment in public equity) capital from leading investors, including affiliates of Gores Metropoulos II, Fidelity Management & Research LLC, and funds and accounts managed by subsidiaries of BlackRock, Atreides Management, LP, and Senator Investment Group.
Following the closure of the business combination, Sonder will draw on $165 million in a principal amount of Delayed Draw Notes to fund operations and support new and existing growth initiatives, and it will have up to $450 million in cash in the trust account of Gores Metropoulus II.
As of October, Sonder was valued at $1.925 billion, which was downgraded from the initial $2.2 billion expected valuation.
Francis Davidson, co-founder and CEO of Sonder, said: “While the travel industry has faced headwinds with the ongoing pandemic, Sonder has continued to grow at a rapid clip, proving the resiliency of our business model and demonstrating our ability to pivot quickly to address emerging trends and traveller needs. We delivered record quarterly revenue in both Q2 and Q3 and we remain aggressively optimistic on the future of travel.
“Today is a historic moment for the entire Sonder team and a testament to how we’ve revolutionised the hospitality industry by reimagining and delivering what the modern traveller demands. We are really proud of what we’ve achieved to date and want to recognise the dedication of all Sonderites.
“We have an exceptional team in place to drive the next chapters of growth for our organisation,” he added.
Sanjay Banker, president and CFO of Sonder, said: “We continue to lead and innovate with our tech-enabled offering, inspiring design, consistent quality, and compelling value that are the hallmarks of a great modern hospitality experience. We appreciate our close partnership 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, revolutionise hospitality, and deliver long-term value to shareholders.”
Ted Fike, senior managing director at The Gores Group, said: “We’re proud to have partnered with Sonder and look forward to supporting their next chapter of growth. With a differentiated, tech-driven platform and unique value proposition, we’re confident that becoming a public company will enable Sonder to solidify its leading position as the hospitality brand of tomorrow.”
Davidson will continue to serve as co-founder and CEO, while Banker will remain in his position as president and CFO.
The news comes in the wake of Sonder’s reporting of record operating and financial performance in Q3 2021, including a sharp acceleration in booking demand, with total revenue seeing a 155 per cent year-on-year increase to $67.5 million.
Launched in 2014, Sonder operates in over 35 markets spanning ten countries and three continents. Its co-founder and global head of real estate, Martin Picard, recently spoke on the BoHoNews podcast about the company’s strategy throughout the pandemic, expansion plans and changing consumer behaviour.