Francis Davidson, co-founder of Sonder, has announced his exit from the business in the same week it completed its integration with Marriott.
Davidson, who co-founded the technology-powered, hospitality-driven business in 2014 and led it as CEO, listed a number of Sonder’s milestones in a LinkedIn post announcing his departure.
The company grew to revenue of $143 million in five years, saw revenues slump to almost nothing during COVID and then went public via special purpose acquisition company in 2022. Davidson said that while that seemed a good idea a year before, the company made $400 million less than anticipated.
“Without profits to post, investors struggled to assign a fundamental value to the business—growth rates be damned,” Davidson said in the post. “Low volume and an increasingly depressed stock price made it practically impossible for institutional capital to build a position in the stock. The vicious cycle kept spinning—a low market cap would expose shareholders to significant dilution if we ever had to raise equity, breeding further selling pressure and exacerbating this risk.”
Despite growing to revenues of $600 million, the company has had a tough ride in the post-pandemic years. It slashed its workforce by 22% in 2022 and by a further 17% last year.
It was also at risk of a delisting from Nasdaq in 2023 and 2024.
But last year, a new chapter opened for the company through a licensing deal with Marriott International, which saw the integration of more than 10,000 Sonder units into the Marriott portfolio and a rebrand to Sonder by Marriott Bonvoy.
“Benefiting from the extensive distribution, loyalty program and sales capabilities of a global hospitality leader will help us to prioritize our core value drivers, including our unique guest experience, while unlocking significant opportunities for increased revenue and cost efficiency,” Davidson said at the time.
A further $50 million cost reduction including layoffs came earlier this year ahead of the Marriott integration.
Thanking co-founders, teammates and investors, Davidson said it’s the right time for a leadership change and that he plans to take some time to “reflect on the past decade, put pen to paper on all of my learnings and—yes—explore new ideas.”