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Sonder agrees to $2.2B SPAC deal

Sonder’s Founders (Credit: Sonder)

Lodging startup Sonder is going public via a special acquisition company (SPAC) in a deal that values the newly combined entity at $2.2 billion. The deal with Gores Metropoulos II will give the hospitality startup $650 million of cash proceeds, including a private placement of $200 million from investors such as Fidelity Management and BlackRock, Reuters noted.

What they do: Sonder refurbishes apartment rentals into short-term, hotel-like units. It subsequently lists them on its website, as well as with Airbnb and Expedia Group’s Vrbo.

Return of business travel will be key: After the pandemic brought travel in the U.S. largely to a halt last spring, the resumption of activity has largely been concentrated among people taking leisure trips. However, business travel and group events like conventions and conferences are crucial for airlines and the hospitality sector.

Be Smart: Loews Hotels CEO Jonathan Tisch told CNBC on Friday that he sees indications that large events will return soon: “We are starting to see groups come back. We are very optimistic about group business in Q3, Q4, next year in 2022… We’re starting to see investment banks book a couple of our hotels with big meetings. That is very optimistic.”

Worth Noting: This news comes months after competitors Stay Alfred & Domio folded during the pandemic. While others were struggling to survive, Sonder beefed up its C-suite in January. The company promoted Sanjay Banker to President and hired Satyen Pandya as its first Chief Technology Officer.

Flashback: The short term rental company raised a $225 million equity round at a valuation of $1.3 billion last year. The SPAC deal is expected to close in 2021. [Bloomberg+CO+CNBC+Reuters]

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