SAN FRANCISCO – Sonder Holdings Inc., a leading next-generation hospitality company that is redefining the guest experience, and Gores Metropoulos II, Inc., a special purpose acquisition company (SPAC) sponsored by an affiliate of The Gores Group, LLC, a global investment firm founded in 1987 by Alec Gores, and by an affiliate of Dean Metropoulos of Metropoulos & Co., announced on April 30 that they have entered into a definitive agreement to combine. The technology-driven hospitality business is expected to have a pro forma enterprise value of $2.2 billion and over $700 million of net cash at closing.
Sonder officially launched in 2014 and was co-founded by Francis Davidson, Chief Executive Officer, and Martin Picard, Global Head of Real Estate. Since its founding, Sonder has executed against its mission to transform the hospitality industry through modern, technology-powered service and inspiring, thoughtfully designed accommodations combined into one seamlessly managed experience. Sonder currently operates more than 300 properties across 35 markets in eight countries.
Sonder works directly with real estate developers and property owners to lease, manage, and operate spaces, providing guests with exceptionally designed accommodations at affordable prices on a nightly, weekly, or monthly basis. Led by a management team with deep technology, operational and hospitality experience, the Company’s tech-enabled, mobile-first platform provides seamless booking, digital concierge, and a unified, on-demand platform for maintenance and service. Driven by Sonder’s differentiated digital service model, the Company can reduce operating costs by as much as 50% compared to traditional hotels.
“Through innovative technology and thoughtfully designed accommodations, Sonder is revolutionizing the hospitality industry,” said Francis Davidson, Sonder’s co-founder and CEO. “With modernized service, we are delivering uncompromising quality with inspiring design, and offering accommodations at a price point that democratizes access to an extraordinary hospitality experience. We are incredibly excited about this transaction with Gores, which we view as a natural extension of our longstanding relationship that will enable us to accelerate our growth on the path to build the iconic 21st century brand in hospitality.”
“Sonder’s differentiated, tech-driven platform and unique value proposition have put the company at the forefront of the hospitality industry,” said Alec Gores, Chairman and CEO of The Gores Group and CEO of Gores Metropoulos II. “With its enormous market opportunity and experienced leadership team, Sonder has already proven the resiliency and scalability of its business and has tremendous potential to continue expanding globally amid tailwinds created by the impending travel recovery. This transaction strikes at the core of our continued focus on identifying and partnering with companies that are true disruptors in their industries, and we’re confident that our partnership will enable Sonder to solidify its leading position as the hospitality brand of tomorrow.”
“Throughout the course of my career I’ve been focused on finding and developing unique consumer brands and experiences,” said Dean Metropoulos, Chairman of Gores Metropoulos II. “Sonder’s fresh approach to hospitality meets the needs of an evolving traveler and puts the company in a great position to take advantage of these rapidly transforming trends.”
The business combination will provide Sonder with additional capital and expertise to accelerate and supercharge Sonder’s vision. Together with GM II, Sonder will be able to further capitalize on opportunities within the growing $800+ billion global lodging market and strengthen its position as a differentiated, rapidly growing innovator in the hospitality industry. Over the next few years, Sonder plans to continue investing in technology and expanding its footprint and product offering to drive an unparalleled guest experience, while also delivering even greater value to its real estate partners.
Sonder expects to achieve approximately $4 billion of revenue in 2025, driven by significant real estate supply growth, global travel market recovery and revenue enhancement initiatives.
“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 & Research Company LLC and BlackRock Inc.,” Reuters reported on April 30, adding that “shares of Gores Metropoulos II rose 0.5% in afternoon trading on Friday.”
Gores Metropoulos II “raised $450 million through an initial public offering in January,” Reuters reported, noting that “Gores Group, a prolific dealmaker in the space, has raised 13 SPACs so far. SPACs are shell companies that raise funds to take a private company public through a merger at a later date.”
“Goldman Sachs serves as the financial advisor to Sonder, while Morgan Stanley is the lead financial advisor to Gores Metropoulos,” Reuters reported.