Montreal-based startup Sonder, which rents out hotel-quality apartments through Airbnb and other websites, said Thursday it has raised $110 million (US$85 million) in a financing led by San Francisco venture capital firm Greenoaks Capital.
According to Forbes, Sonder, both an alternative to Airbnb-like services and an emerging rival to the traditional hotel business, generates US$100-million in annualized revenue. Moreover, the startup says over 200,000 guests have used the platform.
Think of Sonder as a little classier than your average Airbnb rental, but not as bland as a hotel, and thus still offering that homey touch.
The business model is much different than Airbnb, though. The company actually rents 2,200 apartments from real estate owners in 14 cities in the United States, Canada and Europe and, in turn, offers them up online for short-term rentals to business travellers and vacationing families. That means, unlike Airbnb, Sonder is putting up a fair amount of cash securing properties before the client pays them.
Sonder’s properties offer standard mattresses, regularly stocked hotel toiletries and full sets of dishes and cutlery. The company offers a round-the-clock concierge and regular cleaning service.
Sonder also offers an alternative to a downtown or suburban Marriott or Holiday Inn, with larger spaces – often with two bedrooms – in hip neighbourhoods and with more distinctive furniture and art, which vary from location to location. The company lists its rooms through a range of channels, including its own website and Airbnb.
“Given that there was such a movement from traditional hospitality to alternative hospitality, we saw that there would be an opportunity at a really massive scale to provide a customer experience that essentially resolves the two problems of consistency for the sharing economy and authenticity and uniqueness that is lacked in the traditional hotel model,” Sonder’s founder, Francis Davidson, told Forbes.
There’s no doubt that Sonder’s offering holds a ton of value in today’s collective hospitality offering. Put simply, sometimes guests can have terrible experiences at Airbnb, which ruins their vacation.
“Travel is a high cost of failure market,” said Davidson. “If you only have two weeks a year, things can’t go wrong, so we’ve learned to put a really high cost on quality.”
Per Forbes, “Compared to your typical Airbnb, no one “lives” in Sonder apartments except for its guests. Each rental comes with a living room space and kitchen so people can cook and relax like they would in their own home. Units range from studios in a heart of a city to sprawling a six-bedroom unit in downtown Montreal. No two spaces look alike but are instead designed to match the style and decor of the neighborhood around it.”
A 24/7 concierge is accessible through a call or text in case a light bulb burns out or someone forgets their keys. That means Sonder’s cleaning crews and staff have to move throughout the city to service apartments on any given day.