Revolutionizing the Hospitality Industry: An Exciting New Chapter for Sonder
On the heels of Sonder’s recent announcement of going public, the first Real Ventures and FounderFuel portfolio company to do so, we’re thrilled to celebrate their momentous achievement with them and look back on the growth journey that has led them here.
By Sam Haffar, Investment Partner at Real Ventures
7 years ago, Francis Davidson, a McGill University philosophy and economics major dropout whose only prior job experience was a stint as a fast-food worker at McDonald’s, walked into our office with his co-founder Lucas Pellan, who had himself opted out from college altogether. The two pitched Real Ventures this idea that the hotel industry was ripe for change. I remembered that day vividly because Francis and Lucas gave me goosebumps when they explained how their personal apartment became the blueprint for a new business model that would one day take on the likes of major hotel titans and become a global brand standard in the hospitality industry. I immediately loved that Francis and Lucas didn’t fit any mold. They knew they were on to something big and were unfazed whether my partners and I were impressed with their presentation.
Armed with a simple pitch deck and a spreadsheet the two walked us through the financial model with precision-like memory of the numbers. The chance meeting left me thinking that if we believe there is a fighting chance someone can disrupt the incumbent hotel brands then we better bet our money on this team. With each question raised, it seemed like they had meticulously plotted the next 10 years of Sonder’s future in their heads. The depth of their understanding of the market, customer experience, and key business drivers were pretty mind-blowing.
Raw around the edges and bursting with potential we encouraged both founders to participate in FounderFuel, Real Ventures’ accelerator program. We felt the program could help them further refine their business narrative skills as well as give them time to add more structure, frameworks, and product around their fast-growing business, which at the time ran mostly on emails and spreadsheets. Today technology powers nearly every business decision, guest interaction, and business process in the company and is a major business advantage that helps the company achieve a ~50%* operating cost reduction. They gratefully accepted our invite and became the crowd-pleaser on FounderFuel’s Demo Day.
Fast forward to today and Francis has grown into what I firmly believe is a world-class CEO. He has built an incredible team of seasoned executives who have skillfully navigated the havoc wreaked by COVID-19 on the travel and hospitality industry and emerged from the other end as a stronger, market-leading business in an emerging category for hospitality. Getting there wasn’t easy, it demanded an enormous amount of courage from the team and from a group of investors that we’re not easily rattled by the investments necessary to get the business to scale. Real Ventures has had conviction from day one in the company’s long-term potential and in Francis’ continuous growth and development as a leader. We are fortunate to have had the opportunity to invest 6 times in the business from their first round all the way to their Series C financing.
In an investor presentation filed with the SEC in July 2021, Sonder stated a global portfolio of 13,000 live and contracted units across 350 properties in over 8 countries. Per the presentation, the company operates entire curated properties from apartment developments to modernized hotels.
Congratulations to Francis and the entire team at Sonder! As one of the first venture funds to invest in the company, Real Ventures has been privileged to watch the team consistently succeed in delivering on their vision to redefine hospitality by bringing exceptional stays everywhere, expanding the business potential, and raising the bar for what excellence looks like. It has been just as rewarding to see Francis pay it forward by investing some of his time helping out other first-time founders who walked off that same demo-day stage with little more than a dream of their own. I’m forever grateful to my team for deciding to take a leap of faith and betting on Sonder’s potential before it was obvious to the world and before local stays were predictably and consistently an awesome experience for guests worldwide. And finally, thank you Francis and the rest of the Sonder team for believing in Real Ventures’ ability to help out a bit along the way.
To infinity and beyond!