# Sonder (2014 – 2025)

- URL: https://girisimcikafasi.com/en/startup-graveyard/sonder/
- Sector: Travel
- Country: United States
- Total funding: $550 million
- Cause of closure: Business model failed

## What did it do?

Sonder operated short-term rental units in the style of aparthotels across North America, Europe and Dubai. Although it competed with Airbnb, it did not act as a go-between for hosts' listings; instead it leased and managed the buildings itself. Guests used a mobile app to check in and get support, while maintenance and cleaning were outsourced.

## Why did it shut down?

Sonder's model relied on covering the cost of the buildings it leased with short-stay revenue; when the pandemic halted travel in March 2020, the company laid off a third of its staff, 400 people. Shortly after going public through a SPAC merger in January 2022, it cut 21 per cent of its corporate workforce in June 2022. In August 2024 it signed a licensing deal with Marriott that added 10,500 rooms to Marriott's portfolio. On 9 November 2025, however, Marriott terminated the agreement, citing Sonder's default. Sonder abruptly ceased operations the next day and filed for Chapter 7 liquidation on 13 November 2025.

## The story

In the second week of November 2025, some guests staying in Sonder's flats learned in the middle of their stay that they had to leave the building. According to the BBC, guests of the bankrupt company were turned out before their bookings had ended. A start-up once reported to be worth USD 2 billion had gone into liquidation within a week.

The story began in Montreal in 2012. Francis Davidson, a McGill University student, was letting out his own flat, and those of students who left the city for the summer, to earn extra money. In 2014 he founded a company called Flatbook with Lucas Pellan, and it joined the FounderFuel accelerator in Montreal; Martin Picard is also counted among the founders. Later renamed Sonder, the company was based in San Francisco from 2016. The model was simple: rather than acting as a go-between for hosts as Airbnb does, lease whole buildings and run the flats like a hotel through an app. The target was travellers who wanted more space than a hotel room but more predictability than an amateur host could offer. Over time the company managed more than 9,000 units in more than 40 cities and hosted more than 1 million guests.

The pandemic dealt the first big blow. In March 2020 a third of the staff, 400 people, were laid off. Even so, by June 2020 the company had raised more than USD 550 million in total and reached a USD 1.3 billion valuation. It went public through a SPAC merger in January 2022, but in June of the same year cut its corporate workforce by 21 per cent. Meanwhile it was fined in Boston under a new rule banning short-term rentals where the owner does not live on site, and faced objections from neighbours in Minneapolis.

In August 2024 a long-term licensing deal was signed with Marriott; 10,500 rooms were added to Marriott's portfolio and guests could earn Marriott Bonvoy points. Founder Davidson stepped down as CEO in June 2025. On 9 November 2025 Marriott terminated the agreement, citing Sonder's default. The next day Sonder abruptly ceased operations, and on 13 November it filed for Chapter 7 liquidation.

Sonder shows how, in a model with fixed costs and volatile revenue, a single shock and the loss of a single partner can bring a company down.

## Lessons

- In a lease-and-sublet model the rent does not stop when occupancy falls; build demand-linked flexibility or revenue-sharing clauses into your leases.
- Becoming dependent on one large partner's channel can stop the business overnight when that contract ends; keep alternative booking channels alive.
- In hospitality, a wind-down plan has to cover guests too; prepare in advance for transferring remaining bookings and issuing refunds.

## Sources

- [Sonder (company)](https://en.wikipedia.org/wiki/Sonder_(company))
- [Sonder to File Bankruptcy and Liquidate After Marriott Cuts Ties](https://www.bloomberg.com/news/articles/2025-11-10/sonder-to-file-bankruptcy-and-liquidate-after-marriott-cuts-ties)
- [Guests ejected mid-stay from bankrupt hotel chain Sonder](https://www.bbc.com/news/articles/c364yg7g351o)
- [Hospitality Startup Sonder Raises $170 Million At A $1.3 Billion Valuation During Covid-19 Travel Collapse](https://www.forbes.com/sites/stevenbertoni/2020/06/24/hospitality-startup-sonder-raises-170-million-at-a-13-billion-valuation-during-covid-travel-collapse/)