Francis Davidson, co-founder and CEO of Sonder, announced his departure from the company shortly after completing its integration with Marriott International. Davidson, who co-founded the tech-driven hospitality startup in 2014 alongside Martin Picard, shared the news via LinkedIn, citing a turbulent yet impactful tenure.
Under Davidson’s leadership, Sonder quickly grew to $143 million in revenue within five years before the COVID pandemic nearly wiped out earnings. The company then went public through a special purpose acquisition company (SPAC) in 2022, but raised approximately $400 million less than expected. Davidson described a challenging situation where low revenues and declining stock prices led to a "vicious cycle" that deterred institutional investors and increased shareholder dilution risks.
Despite rebounding revenues reaching $600 million post-pandemic, Sonder continued to struggle financially. The company undertook substantial workforce reductions, cutting 22% of its employees in 2022, an additional 17% in 2024, and another layoff earlier this year representing about $50 million in cost reductions including layoffs earlier this year to streamline operations. Sonder also faced potential delisting from Nasdaq in both 2023 and 2024 after its stock fell below the $1.00 per share threshold.
Amid these difficulties, a pivotal 20-year licensing agreement was forged with Marriott, leading to a rebranding as "Sonder by Marriott Bonvoy." The integration process, completed last week, brought over 9,000 Sonder units into Marriott's portfolio. Experts suggested the strategic partnership might alleviate financial pressures and restore investor confidence, particularly following controversies around accounting errors and a 2024 investor class-action lawsuit.
In the interim, Janice Sears, who joined Sonder’s board in 2021 and became chairperson earlier this year, steps into the role of CEO while maintaining her chair position. Sears previously held senior leadership roles at Bank of America Securities, bringing extensive executive experience to guide Sonder during this transitional phase. The board has already initiated the search for a permanent CEO, aiming to capitalize on recent positive business trends.
Davidson concluded his tenure with reflections on Sonder’s journey, acknowledging successes and challenges alike, suggesting that alignment with a major hospitality brand like Marriott could represent the strategic clarity the company needs for future growth and profitability.
