Sonder Holdings, Inc. (SOND) experienced a dramatic surge in its stock price on Monday, soaring over 125%. This surge was driven by the company’s announcement of a long-term licensing agreement with Marriott International, Inc. (MAR). This agreement will see Sonder’s portfolio of mostly apartment-style accommodations integrated into Marriott’s system under a novel collection titled ‘Sonder by Marriott Bonvoy’.
Under the terms of the agreement, Marriott will earn a royalty fee based on a percentage of Sonder’s gross room revenues. Sonder’s rooms will be gradually integrated into Marriott’s system over the course of several years. This partnership aligns with Marriott’s strategy of providing diverse accommodation options for various travel needs and generations. As stated by Marriott Global Officer, M&A Tim Grisius, “Marriott has long believed in providing the right product at the right price point for all trip purposes and generations of travelers. With the planned addition of Sonder by Marriott Bonvoy, we will be able to provide guests seeking apartment-style urban accommodations with even more options in the Marriott Bonvoy portfolio.”
Beyond the licensing agreement, Sonder has secured substantial new liquidity, totaling approximately $146 million. This includes a $43 million convertible preferred equity investment from a group of investors, $83 million from existing noteholders (including $4 million in recent financing), and an additional $20 million from other sources. This financing adds to the previously announced $16 million in financing from noteholders.
The significant investment from Marriott and other sources highlights the growing appeal of Sonder’s model, which offers a unique blend of apartment-style comfort and hotel amenities. The integration into the Marriott Bonvoy program promises to expand Sonder’s reach to a wider audience, potentially boosting its revenue and market share. It remains to be seen how the market will respond to this strategic alliance in the long term, but the initial reaction suggests investors are bullish on Sonder’s future prospects.
