Sonder, a San Francisco-based startup that leases apartments and flips them into short-term rentals, closed on a $210 million funding round.
A hotel-room-style listing startup just obtained unicorn status.
Sonder, a San Francisco-based startup with a platform that leases apartments and transforms them into furnished short-term rentals, closed on a $210 million funding at a $1 billion valuation, the company said Thursday.
Sonder’s big funding round signals confidence in the hospitality startup that is competing with Airbnb, which largely draws income from fees it charges renters and hosts.
Unlike Airbnb, Sonder relies on an asset-heavy model that draws some comparisons to WeWork, which also leases space, outfits them and then rents them to end users.
Sonder entered the New York market last year after signing a lease at 20 Broad Street and has side-stepped the city’s strict short-term rental laws by occupying buildings that meet the zoning and building requirements of a hotel.
Airbnb, which is now valued around $38 billion, has been forced to tighten its policies in the city, where the laws restrict short-term rentals unless the owner of a home lives there.
Sonder says that it manages more than 8,500 units in 711 buildings. It currently has locations in 20 cities and said it recently signed leases in Philadelphia, Chicago, Seattle, Dubai and Dublin.
The company has raised a total $400 million, which includes an $85 million series C fundraise last August. The latest funding round was backed by Fidelity, Valor Equity Partners, Atreides Capital, ARod Corp and the Pritzker family through Tao Capital Partners. Its early stage investors, Spark Capital and Greenoaks Capital, also participated.
In addition to the $210 million fundraise, an additional $15 million in equity will be provided by developers who are partnering with the firm.