Despite the challenges Covid-19 has inflicted on the hospitality industry, apartment-style accommodations provider Sonder announced it had raised an additional $170 million in a Series E financing round, bringing its valuation to $1.3 billion. It also said it expects to raise additional capital from new and returning investors, which could bring the current round total to about $200 million.
Sonder, which before the pandemic had expanded its presence in New York City and said about one-third of its stays were from corporate travelers, plans to use the new capital to continue scaling its business "thoughtfully and responsibly" in the wake of Covid-19. In March, the company laid off 22 percent of its workforce and furloughed roughly 11 percent, affecting about 400 people.
The announcement also noted Sonder's ability to pivot toward providing longer stays for guests in need of housing during the crisis, "leading to a higher-than-average occupancy rate of 40 percent at the height of the pandemic." It also is positioning itself as offering "self-contained spaces and self-service solutions—including digital check-in, keyless entry, professional cleaning and no lines or crowded lobbies"—something that it did prior to the pandemic, and which "are the foundation of what guests now demand from a hospitality company." Its current global occupancy rate is 75 percent, it said.
The latest round, led by Fidelity Funds, WestCap Group and Inovia Capital, puts the company's venture funding to date at about $560 million, the company said in an email. Additional investors in the round include Spark Capital, Greenoaks, Valor Equity, Greylock, Gavin Baker's Atreides Capital, the Pritzker family's Tao Capital and Lennar.