Sonder, which rents serviced apartments akin to boutique hotels, has raised $225 million at a valuation north of $1 billion, the company announced this morning.
News of the round, which brings Sonder’s total raised to date to more than $400 million, follows an April report from The Wall Street Journal that the business was closing in on its unicorn round. Valor Equity, Westcap and Nicolas Pritzker via Tao Capital Partners have co-led the round with participation from Fidelity, Atreides Capital, ARod Corp, Spark Capital and Greenoaks Capital.
The Airbnb competitor says it tripled the number of rentable units in its online marketplace last year with more than 8,500 spaces in 20 cities around the world available today. San Francisco-based Sonder expects a $400 million revenue run rate by the end of 2019, representing 4x growth year-over-year.
“The future of hospitality will be dynamic,” writes Sonder co-founder and chief executive officer Francis Davidson in a statement. “It will demand flexibility. And that’s what our diverse, unique and adventure-seeking world is like too. That’s why, while our spaces will continue to take on new forms and expand to exciting neighborhoods around the world, a Sonder will always be unforgettable.”
Sonder, founded in 2012 while Davidson was a freshman at McGill University, raised a $135 million round last year. The company, which accommodates stays as short as one night and as long as two years, for example, provides hotel-like amenities in fully furnished apartments.
As Airbnb gears up for an initial public offering or direct listing expected in the next year, investors look to new investment opportunities in the space. Indian hotel startup Oyo recently secured new cash, including a large investment from Airbnb itself. Additionally, boutique hotel company Life House attracted $40 million and Mint House raised $15 million to provide a better hotel experience.