Sonder is building the future of hospitality with $135 million in funding

By Francis Davidson, CEO and Co-Founder of Sonder

6 years ago, I created Sonder. I was a freshman at McGill, hopeful and ambitious. I had no money, no network, no experience. I didn’t know what an angel investor was, nor had I ever known an entrepreneur. I could never have imagined that today we’d announce raising $135 million to continue transforming the future of hospitality.

In all cultures across the globe, the first thing we think about when we have a week of free time and a bit of disposable income, is shockingly universal: to travel. A trillion dollars is spent on accommodations every year, and it is, in fact, the fastest growing sector of the global economy, with $50B of demand added yearly. And yet the dominant hotel brands are sleeping at the wheel.

Travel was once a privilege reserved for the wealthy. Look no further than the bellhops, three-piece suits and taxi whistles found in most chain hotels—vestiges of a time when travelers were pocket-watch-carrying aristocrats. The industry has done little to innovate throughout the years. Accommodations remain far too expensive and manage to stay this way despite also being sterile and inauthentic by design?—?think beige stucco boxes stuck in downtown strips or near the airport, replete with chain restaurants and corporate color schemes. I predict that the next generation of travelers will find it hard to believe that hotels were once so disappointing and lifeless and unaffordable.

My first summer in college at 19, I rented out my apartment to travelers during break to earn extra money. I spent my days welcoming visitors, valeting their cars, even greeting them with a bottle of wine when I could. The model worked, and the following year I was managing the empty flats of several fellow students during the summer months. I partnered up with my co-founder Lucas Pellan, and a year later I dropped out of college after Sonder completed its first million dollars in sales.

We quickly realized that there was a missing quadrant in the travel industry. Accommodations are divided between marketplaces and hotel brands. The hotel brands (such as Marriott, Hilton) build new hotel supply and focus on providing a consistent experience. The marketplaces (Expedia, aggregate that supply and make it easy for travelers to browse through options, read reviews and book a stay. Yet for alternatives to hotels, only the marketplace side existed (sites like Airbnb and HomeAway), and no one was building large amounts of new alternative supply and offering a consistent, high quality, above-board experience. We set out to build that missing piece of the ecosystem. Now, 4 years later, we are the global market leaders with more than $1.3 billion worth of real estate under management across 4 countries and a revenue run rate of $100 million. Hundreds of thousands of guests have stayed in a Sonder. And we’re just getting started.

A Sonder is a beautiful space built for travel and life. Sonders come in many formats, from an efficiency studio to a multi-bedroom space for families or groups of friends (why have hotels forgotten about those critical demographics!). Each space is uniquely designed and spacious, and has a kitchen, dining area and living area. Sonder spaces aren’t limited to downtown high rises: our offering spans across the neighborhoods that define a city and its unique heritage. We partner with developers to bring those spaces to life, and our local staff ensures they are clean and well-serviced, offering frictionless stays.

While it’s become standard procedure for startups to bypass regulators in the name of disruption, Sonder has taken a different approach. We forge relationships with cities, ensure local rules are always respected — decrepit office buildings, blighted property, underutilized industrial buildings, and brand new constructions are currently being developed into fully licensed Sonder spaces across the world. We’re working hard on opening locations in all major metros across the US and Canada, and will also be using our funding to fuel more overseas expansion.
Sonder, Miami

I’m most thrilled about the spectacularly brilliant, hard-charging and collaborative colleagues who have joined me along this journey; we’ll need all the help we can get and are hiring hundreds of new team members with the rare capabilities and character to get the job done. Opportunity paired with outstanding people and an innovation-driven culture will enable us to build what we believe will become a ubiquitous, global consumer brand that reshapes an age-old industry.

The world’s beauty and diversity fascinates, enchants and enthralls all of us. It makes all the sense in the world to go out there and see it. Now it’s time to step up the game and pair the world’s gems with beautiful spaces built for travel and life.

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