Today, short-term rental provider Sonder announced it has secured $210 million in a Series D that values the company at more than $1 billion.
Subscribe to the Crunchbase Daily
The San Francisco-based hospitality startup said it’s planning to increase that Series D to $225 million over the coming weeks, with additional capital “from select developers who are partnering with Sonder on new deals in cities all over the world.”
Sonder has been compared to Airbnb but it maintains a few distinctions. For one, it appears to be focused on higher-end properties.
Sonder is also developing into somewhat of a real estate play since it is working more with developers to build new units, and furnish them with the sole purpose of being rentals. Via email, a spokesperson said: “Sonder has a variety of building-types, from ground-up construction to adaptive reuse of historic properties and everything in between.” The company also offers text-enabled around-the-clock concierge service, and confirms that while it doesn’t own any of its units, all of them “are directly leased and managed by” Sonder. It focuses on leasing large groups of units at various properties. Customers can book via Sonder’s site or through online travel agencies such as Expedia or Airbnb.
Founded just five years ago, Sonder has been growing rapidly. Via email, the company said it tripled its number of signed units to 8,500 spaces in over 20 cities around the world such as London, Rome and San Francisco. It’s currently projecting a $400 million revenue run rate by year’s end, which it says is “four times that of last year.” It’s also raised $345 million in funding (soon to be $360 million), according to its Crunchbase profile. Valor Equity Partners led Its latest capital infusion, which also included participation from Greylock Partners, Spark Capital and others.
Twenty-somethings Francis Davidson and Lucas Pellan co-founded the company after successfully casually renting out spare apartments used by university classmates to tourists in Toronto, according to Forbes.
The real impetus for creating the company in 2014 was born out of an unpleasant apartment rental in San Francisco. According to its website, “the apartment didn’t look like it was ready for visitors. There was half-eaten food in the fridge and dog hair blanketing the furniture.” Their goal was, and continues to be, to provide a place with the reliability of a hotel but “with all the warmth and character of a home.”
Illustration: Li-Anne Dias.