Sonder Co-Founder Exits as Marriott Licensing Begins

Sonder, a manager of short-term apartment hotels, is set to undergo a massive change, but without its longtime leader.

The once proptech darling announced Wednesday that co-founder Francis Davidson resigned from his position as chief executive. Davidson also left his board director role, according to Hotel Dive, ending his leadership of the hospitality firm he co-founded in 2014.

The executive change comes amid Sonder’s completed integration with Marriott International.

“Building Sonder was an epic journey,” Davidson wrote on LinkedIn.

Under Davidson’s guidance, Sonder expanded from a Montreal startup into a worldwide hospitality operation reaching millions of customers in over 40 markets spanning nine countries. Still, the company’s market capitalization plummeted from $1.9 billion in 2022, when it went public, to just $29 million last August.

In August, the company inked a licensing deal with Marriott that brought roughly 9,000 Sonder properties into Marriott’s system under the “Sonder by Marriott Bonvoy” brand.

The 20-year agreement also provided Sonder with $126 million in financing when the company desperately needed capital after experiencing negative cash flow of $108 million and facing Nasdaq delisting notices. Share prices dropped last March when the company disclosed financial reporting errors affecting 2022 and 2023 statements. Investors filed additional litigation last June.

The company underwent multiple rounds of layoffs and lease renegotiations as it shifted focus from growth to profitability amid higher interest rates. Following the Marriott announcement, Sonder appointed Michael Hughes as chief financial officer, who implemented expense reductions and workforce cuts to improve its financial position.

Board chair Janice Sears will serve as acting CEO while directors launch an executive search. Sears will retain her chairperson duties.

Sears joined Sonder’s board in 2021 and assumed the chairperson role this year. Her background includes 20 years at Bank of America Securities in multiple positions.

Company representatives declined to provide further comment to the publication about the executive transition.

As for Davidson? He wrote, “I’ll be taking the next few months to reflect on the past decade, put pen to paper on all of my learnings and – yes – explore new ideas. After all, I always identified more with the ‘co-founder’ part of my title than whatever came next.”

— Holden Walter-Warner