Sonder’s stock ended down 2% on NASDAQ on Wednesday at US$8.22, for the stock market debut of the tech-real estate company founded in Montreal but run from San Francisco.
Posted at 12:00 p.m.
The title of this company with its Canadian headquarters in Montreal fluctuated during a volatile session where the NASDAQ lost 1.2% and where turbulence continues to hit the stock market, especially growth stocks linked to the sector. technological.
Specialized in one-off stays, Sonder goes public by merging with the acquisition company with a specific vocation (special purpose acquisition company, or SPAC) Gores Metropoulos. It is a similar mechanism that the Quebec manufacturers of electric vehicles Lion and Taiga used last year to jump on the stock market.
Known in its early days as Flatbook, Sonder bills itself as a disruptor in the hosting industry. The business model consists of signing long-term leases as the main or sole tenant of a building and then renting the spaces for stays of varying duration.
Founded in 2014, Sonder is still led by Francis Davidson, one of the company’s co-founders. This 29-year-old Quebecer, originally from Outaouais, is a former student of McGill University. The idea for Sonder came to him when he wanted to sublet his apartment during the summer following his first year at McGill.
“We made good decisions, but we were also very lucky, especially to associate myself with incredible investors, mentors, extraordinary employees and colleagues because, personally, I do not have the necessary experience. to build a company that can go to NASDAQ. I had to surround myself with people who know how to do this and follow their advice,” says the entrepreneur.
The NASDAQ listing will allow Sonder to “aggressively” invest in growth, expand into new markets, and hire more people on the technology team to continue innovating and developing the platform. he said.
IMAGE FROM A SCREENSHOT
Francis Davidson in interview with The Press through Zoom Wednesday
“There’s also an interesting connection to the transparency of the company’s finances which makes property owners feel much more comfortable working with us,” says Francis Davidson.
He cites as an example the city of Barcelona, Spain, where Sonder has just landed. “If you talk to a real estate owner in Barcelona who has never heard of Sonder, it will really help to be able to say: here is what we have in cash, here is our financial statements and here is the market value of the company. . It gives us a lot more credibility. We believe this will help us sign even more agreements and grow faster. »
So far, Sonder’s growth has only been organic. Sonder has not yet made any business acquisitions. Going public will allow Sonder to use its stock as currency to make acquisitions in the future, should the opportunity arise.
For the time being, however, Francis Davidson maintains that management is focused on organic growth.
For us, growth is not necessarily about going into new geographic markets as much as going deeper into geographic markets where we are already present. There are huge markets in which we already have a presence. In New York, for example, we barely have 1% of the market, so we still have several years of growth ahead of us.
Francis Davidson
After hitting $143 million in 2019, Sonder’s revenue fell to $116 million in 2020 during the pandemic. However, the company should soon reveal an interesting rebound when it publishes its results for 2021 since the revenues for the first nine months of the last year amount to 146 million US. Sonder, however, remains in deficit. For the first nine months of 2021, the loss reached 214 million US.
Francis Davidson aims to “turn the accommodation sector upside down” with a “more modern” approach. “Any category of accommodation (apartments, hotels, resorts, etc.) offers an opportunity to transform with technology, and that resonates well with the next generation of travelers,” he says.
Present in 10 countries, Sonder has more than 1,500 employees, including nearly 200 in Montreal. The company’s stock trades under the symbol “SOND” on NASDAQ.