- Hospitality company Sonder announced it raised $210 million in funding at more than a $1 billion value. And the company is expecting $400 million in 2019 revenue.
Sonder (previously known as Flatbook) announced it closed $210 million in Series D funding at a valuation of more than $1 billion. This round of funding was led by Valor Equity, Nicholas Pritzker (former chairman and CEO of Hyatt) via Tao Capital Partners, and Westcap (founded by former Airbnb CFO Laurence A. Tosi). Tosi is joining the board in conjunction with this round.
Plus Sonder announced it is expecting $15 million in investment over the next few weeks from select developers who are partnering with the company on new deals across cities around the world. Including this round of funding, Sonder has raised more than $360 million.
Sonder also pointed out that it more than tripled the number of signed units on its platform, meaning it now has more than 8500 spaces in over 20 cities around the world. And Sonder also projected a $400 million revenue run rate by the end of the year. This would be four times larger than the previous year. Plus Sonder also pointed out that it cut the cost of “onboarding space in half.”
Existing investors Greenoaks, Spark Capital, Greylock, Structure, Real Ventures, and ScaleUp Ventures and new investors Fidelity, Atreides Capital, Inovia Capital, and ARod Corp. (Alex Rodriguez) also joined this round.
“I led the seed (round at BDC) and it has been phenomenal to watch this company grow,” explained ScaleUp Ventures partner and former associate director of IT Venture Fund at BDC Matt Roberts via BetaKit. “Having been front and center for the entire thing, I have never felt more sure about the opportunity in front of a company as I do for Sonder.”
Sonder was launched by Francis Davidson and Lucas Pellan while students at McGill University in Montreal, but it relocated to San Francisco since then. They started the company by renting out spare apartments used by classmates to tourists.
Sonder essentially competes against Airbnb as it offers access to homes for rent. But what makes Sonder different is that it owns the properties it rents out. Inovia Capital partner Chris Arsenault pointed out in a blog post that “Sonder has the team and operational plan to scale the benefits of home sharing, while quickly overcoming challenges.”
With this round of funding, Sonder is planning to open a second headquarters location in Canada. And the company is also planning to hire several hundred engineers, designers, finance, and operations experts next year.