US-based travel accommodation provider Sonder has secured $170m in a series E round valuing it at $1.3bn that, according to The Real Deal, included home builder Lennar, it announced on Wednesday.
Investment and financial services group Fidelity co-led the round with growth equity firm WestCap and venture capital firm Inovia Capital, and The Real Deal reported that it also featured Spark Capital, Greenoaks Capital, Valor Equity, Greylock Partners, Atreides Capital and Tao Capital.
Founded in Canada as Flatbook in 2012, Sonder provides renovated high-end apartments in a range of cities that serve as an alternative to hotel accommodation.
The company oversees some 12,000 rooms across 28 cities and has pivoted toward offering temporary accommodation during the Covid-19 pandemic while furloughing or firing roughly a third of its staff.
Sonder said in a blog post announcing the round that it intends to raise a further $30m to close it at $200m, adding: “This fundraise and valuation increase comes after the most severe downturn the hospitality industry has ever faced.
“While we expect the recovery from the pandemic to be long and difficult, with this latest round of funding, Sonder is well-positioned to help lead a reinvention of the travel industry in the months and years ahead.
“With this new funding, our priority is to scale Sonder carefully and responsibly. We will continue to engage with our real estate partners about new exciting locations as well as innovate on the guest experience and continue to ensure Sonder remains a great place to work for our employees.”
The funding follows a $225m series D round in July 2019 that was co-led by Valor Equity, Westcap and Tao Capital Partners and backed by Fidelity, Atreides Capital, Spark Capital, Inovia Capital, Greenoaks Capital and ARod Corp at a valuation above $1bn.
Greenoaks Capital had previously led an $85m series C round for Sonder that was disclosed in August 2018, taking its total funding to $135m.
The company has not revealed details of its series B funding but raised $7.6m in a 2016 series A round led by Spark Capital that featured Thayer Ventures, Real Ventures and BDC Capital to increase its overall funding to more than $11m. Its investors also include Structure Capital.
