Skift Take
Sonder revenues are rising while its losses are widening, even as SPAC offers are coming under extra pressure. The brand-new financing raised will help continue to focus on developing the business and hopefully keep the economics in check enough to finish the deal.
Rafat Ali
San Francisco’s short-term rental start-up Sonder has lowered its going-public-through-SPAC appraisal down to $1.925 billion from the earlier prepared $2.2 billion, as market conditions change and SPACs deal with more headwind.
It has actually also pressed back the completion of its reverse merger handle Gores Metropoulos II, the black check business backed by the Gores Group that is taking it public, from the earlier prepared for close October 28 this year to January 31, 2022, though the 2 insist they will close the deal by the end of the year.
That said there are some positives in the recently restructured offer in between the 2 celebrations: Sonder will get an $110 million in additional capital from affiliates of Gores Metropoulos II and other leading investors, including Fidelity Management and others, in addition to the $200 million formerly revealed pipeline.
Likewise, Sonder has access to $220 million debt center with existing pipeline investors, to be available following the closing of the merger, which Sonder states will suffice to fund its development over the next several years.
“With this incremental investment, we will have ~$530M of capital at closing, in addition to up to $450M proceeds from the SPAC trust, which provides for a totally funded service strategy upon closing,” the SPAC said in a letter to Sonder group. “A key takeaway from today’s news is that our enthusiastic growth and expansion strategy remains the same and should be fully-funded. Our company believe the addition of this incremental financing brings stability and security, making it possible for Sonder to be appropriately capitalized to fund our continued growth over the next a number of years. We believe that the combination of this incremental capital and our proactive response to altering market characteristics will put us in the very best position to drive long-term worth creation for our shareholders and staff members.”
Alec Gores, the buyout sponsor of the deal, told New york city Times that the “market has moved– and we absolutely get that … [a] s long as you have an excellent business, the marketplace is going to enter 100 different methods, and we simply need to be clever adequate to acknowledge where the market is.”
The complete filing with the modified merger agreement is here.