Lodging startup Sonder agrees to go public via $2.2 bln SPAC deal

The deal with special purpose acquisition company (SPAC) Gores Metropoulos II will include a private placement of $200 million from investors including Fidelity Management & Research Company LLC, funds and accounts managed by BlackRock Inc and Senator Investment Group. The San Francisco-based company works with real estate developers, who build the properties that Sonder later operates under its brand name, Chief Executive Officer and co-founder Francis Davidson told Reuters in an interview.

Lodging startup Sonder, which offers refurbished properties for short-term rentals, has agreed to be taken public by a blank-check firm backed by billionaire investors Alec Gores and Dean Metropoulos that values the combined company at around $2.2 billion. The deal with special purpose acquisition company (SPAC) Gores Metropoulos II will include a private placement of $200 million from investors including Fidelity Management & Research Company LLC, funds and accounts managed by BlackRock Inc and Senator Investment Group.

The San Francisco-based company works with real estate developers, who build the properties that Sonder later operates under its brand name, Chief Executive Officer and co-founder Francis Davidson told Reuters in an interview. "I think you can view us as a next-generation Marriott," Davidson said, adding that Sonder partners with companies including Expedia Group Inc, Airbnb Inc and Booking.com to reach out to customers.

Sonder expects to achieve about $4 billion of revenue in 2025 and said its technology-driven service model can reduce operating costs by as much as 50% compared with traditional hotels. Launched in 2014, Davidson came up with the idea for Sonder while managing a few apartments for short-term stays as a university student in Montreal.

Davidson said it was a "no-brainer" for Sonder to partner with GM II, which raised $450 million through an initial public offering in January. The SPAC's backers had also taken lidar sensor maker Luminar Technologies Inc public in a deal worth nearly $2.9 billion in August last year. SPACs are shell companies that raise funds to take a private company public through a merger at a later date.

Goldman Sachs is acting as the financial advisor to Sonder, while Morgan Stanley is the lead financial advisor to Gores Metropoulos.