Sonder Could Go Public Via SPAC at $2.5B Valuation

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Sonder could go public through a blank-check company in a deal that would value the short-term rental startup at more than $2.5 billion, Bloomberg reported.

Sonder, which leases properties to turn them into short-term apartment buildings, has been in talks to merge with special purpose acquisition company (SPAC) Gores Metropoulos II Inc. and go public, according to Bloomberg.

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The Gores SPAC — sponsored by The Gores Group and Metropoulos & Co. — launched in January after it raised $450 million in an initial public offering (IPO), the company announced.

Spokespeople for Gores and Sonder did not respond to requests for comment.

The hospitality industry was walloped during the pandemic with hotels shuttering, and flexible hospitality companies Stay Alfred and Domio folding.

Sonder laid off a third of its staff last year, and is facing lawsuits from two Manhattan landlords for failing to pay rent or for backing out of a lease.

However, the San Francisco-based Sonder reached unicorn status in July after it closed a $210 million funding round. Also, it announced plans last month to reopen the Flatiron Hotel, which it first leased in 2019.

If the deal goes through, Sonder will join a growing number of real estate companies going public in recent months by merging with a SPAC, which carries far less scrutiny than the traditional IPO process.

In March, WeWork agreed to merge with BowX Acquisition Corp. in a deal that would value the coworking giant at $9 billion. And high-end gym chain Equinox has been in talks with as many as 12 SPACs to go public, also at a $9 billion valuation, even as gyms face a particularly uncertain future.