The SPAC attack is back for a San Francisco-based hospitality startup.
Sonder confirmed Friday that it will go public by merging with a SPAC backed by billionaires Alec Gores and Dean Metropoulos. The company scored a valuation of $2.2 billion in the deal and expects to reap $650 million in the offering, Reuters reported.
The SPAC that Sonder will merge with, Gores Metropoulos II, raised $450 million in its initial public offering in January. An additional $200 million is expected from private investors including BlackRock, Fidelity Management & Research and Senator Investment Group.
Goldman Sachs is advising Sonder, and Morgan Stanley is the leading adviser to Gores Metropoulos II.
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Sonder recently took over the Flatiron Hotel in New York City as part of its model to lease, refurbish and rent short- and medium-stay rooms. Francis Davidson co-founded the company in 2014 while managing several apartments in Montreal as a university student.
Gores and Metropoulos facilitated an IPO for lidar sensor maker Luminar Technologies last August in a nearly $2.9 billion merger with a different SPAC.
Special purpose acquisition companies are shells that raise funds through an IPO without underlying assets. SPACs can then merge with private companies, taking them public in the process.
After a record 109 SPAC deals in March, the market cooled with just 10 deals in April, according to SPAC Research. Proptech was no exception, with 15 new SPACs in February followed by 16 in March and just one so far in April, according to TRD’s SPAC tracker.
[Reuters] — Orion Jones