Today we ponder the fate of Sonder, a Canadian-founded company that appears to be near its end.
What happened: Hotel giant Marriott International abruptly ended its licensing deal with Sonder, after the aparthotel platform defaulted. The deal had propped up Sonder by listing its rooms on Marriott's website and Bonvoy app. Without it, the Montréal-founded Sonder looks, for lack of a better word, donezo.
- Sonder is the latest in a long line of companies that went public via special-purpose acquisition companies in the early 2020s but have since crashed out.
Catch-up: Founded in 2014, Sonder grew a dedicated customer base by offering cool apartment spaces while also providing the kind of hotel services you wouldn’t find in most rentals. It was able to accrue some 9,400 units across more than 40 cities in 10 countries.
Yes, but: Sonder could never achieve profitability and faced financial precarity even after going public in 2022. Things got really bad last year after it uncovered “accounting errors” for its 2022 and 2023 fiscal years, causing share prices to nosedive and investors to sue.
Why it matters: It’s ironic that Sonder is on the outs while the model it helped popularize takes off. Aparthotels are growing in popularity, as they offer a middle-ground for guests between Airbnbs and hotels, and a way for cities to add room capacity without building new hotels.—QH