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Building the future of hospitalitySeries D Deck
We want to become
the world’s largest
and most loved
hospitality brand
Fastest growing segment
of the global economy
Millennials spend
travelling
Of travellers will
be millennials
Building the Future of Hospitality
days
per year35
by
202550%
We travel more than ever before...
annual
growth5%
Authentic experience
Digital natives
Social media friendly
Can’t be $400 a night
Building the Future of Hospitality
...and needs are changing.
Travelers are forced to choose between two flawed options.
Building the Future of Hospitality
Hotels
Soulless
Only downtown
Cramped rooms
Antiquated service
Slow internet
01
Individual Hosts
Unreliable and inconsistent
Not always clean
Not always comfortable
Spotty responsiveness
Safety concerns
02
We’re building the next generation hospitality company.
1900s
Independent hotels
1950s
Big box chains
2000s
Peer to peer
Tomorrow
Tech-enabled brand
Building the Future of Hospitality
1900s
Independent hotels
1950s
Big box chains
2000s
Peer to peer
Tomorrow
Tech-enabled brand
We’re building the next generation hospitality company.
Building the Future of Hospitality
13 units・North Park $155
a night
111 units ・ CBD $151
a night
16 units・Covent Garden £181 per
room
169 units ・ FiDi $225
a night
$2.3b+
Assets under management
6,500+Units
71NPS (industry avg 37)
700+
Employees
$200mTotal financing
100%Regulatory compliance
28
Markets
300,000+Guests hosted
$313MExpected NTM Revenue
We’re the market leader in tech-
enabled hospitality.
Guest Experience Unit Economics Supply Demand Defensibility
Guest Experience
“
We travel frequently with our friend
group from all over the country
and we found this amazing space...
We had never stayed in a Sonder
rental before but we will never stay
anywhere else again if we have
the option!
Guest Experience
We built an experience people love...
Lynette
WEST VIRGINIA
34 points
above avg
...and made the it increasingly consistent.
Guest Experience
01
Connected home initiative reduced
access issues.
02
QA process implementation, dispatch
app improvements, and third party
housekeeping incentive plans allows us
to identify even more minor issues
before guests check-in.
Guest issue rate
We accommodated hundreds of thousands of diverse guests.
Guest Experience
From 163 Countries in Total
Average Guests per Stay: 2.5
Average Daily Rate (ADR) per Bedroom: $129
Length of Stay: 4 days
23%
Couple
33%
Business
24%
Family
14%
Friends
6%
Solo
260,000
guests to
date
TTM guests
Guest Experience
in a fantastic location
A jaw-dropping space
with seamless service
What do they want out of a place to stay?
Guest Experience
Outstanding Spaces
Exceptional style
Designed for living
Accommodating groups
Guest Experience
41
7
30
45 138
24
96
36
51
14
76
21
Best Locations
Walkable neighborhoods
Lively & safe
Large selection
10
186
Guest Experience
Mobile-First Service
The lobby is on your phone
Casual and personalized service
No tipping and free, fast wifi
Unit Economics
Guest Experience Unit Economics Supply Demand Defensibility
We transformed the hospitality operating model with technology.
Unit Economics
Hotel
Operating
Costs
Operating
Costs
Services
Messaging, not calling
Centralized contact center
Self-serve & automation
(74%)
Process
Automation
Check-ins
Requests
Operations
Amenities
On-demand services
Partnerships
Unit Economics
We built a very strong business model.
Cumulative cash flow by unit, assuming no future improvement
Three unit economic levers
01
Improve revenue per available day.
02
Decrease direct costs.
03
Decrease location acquisition cost (LAC).
~10x ROI
Note: Assumes CapEx refresh at year 6.
Unit Economics
In 2018 we completely transformed our unit economics.
Annual Unit
Contribution
Location Acquisition
Cost (LAC)
Location acquisition cost payback (months)
2017 2018
Revenue
Rent
Direct Costs
Contribution 6,284 9,206
2017 2018
CapEx
Rent during Setup
Security Deposit
Rent Abatement
Revenue Ramp-Up
Total LAC 17,611 9,530
Unit Economics
Our markets are generating an increasing amount of contribution...
Annualized contribution per unit ($) by market-cohort
Contribution margin by market
Unit Economics
...making all of our markets with over 100 live units profitable.
EBITDA margin by market
Supply
Guest Experience Unit Economics Supply Demand Defensibility
Supply
Breakout growth started in Q3 2018...
6.2x
2828
01
Following our unit economics success,
we turned our attention to growth and
in H2 added supply that will generate
148M of annualized revenue.
02
Our productivity per person has
increased from 7 to 30 units per month
over the last 12 months.
03
Our average deal size is now 19 units
(vs 5 units as of YE 2017), and we
currently have 2,400 units signed or in
lease negotiation for Q1.
Units signed per quarter
Fire & Safety
Compliant with all local fire
and safety requirements
Zoning
All new units are commercially
zoned and eligible for hotel
or transient licensing
Supply
We achieved 100% compliance by targeting under-construction supply
that meets hotel standards.
Insurance
$10M in liability coverage
Taxation
Pay relevant tourism, value
added and municipal taxes
ADA
Compliance with ADA
guidelines in all non-exempt
properties
Inspections
City staff available to assist
regulators for periodic
inspections
Opportunities
296K
88K
Completed units
in top US cities
in 2019
Supply
We identified all developments in the US.
Class A Buildings,
Attractive Locations,
and Correct Zoning
We built a growth machine that delivers high quality and volume...
Supply
01
Accurate
Underwriting
02
Sound
Investments
03
Predictable
Conversion
Brand standards
Contribution margin
Payback
Risk
LOIs sent
39%
91%
LOIs signed
Leases
signed
Lease Start Cohort
Actual÷Forecast Goal
9 units・March 2019
46 units・October 2019
95 units・July 2019
96 units・July 2019
Supply
Strong value add compared to multifamily leasing
Value add for developer relative to traditional multifamily use
Demand
Guest Experience Unit Economics Supply Demand Defensibility
We surpassed 100M run rate with no direct marketing spend...
Demand
01
Scalable and cost-effective
distribution partnerships.
02
Great experience fuels 5 star reviews
and high search ranks.
03
Brand awareness and repeats are
translating into more direct bookings.
77%
occupancy
Revenue run rate ($M)
Demand
In 2019 we will finally lay the foundations for what
will become an iconic consumer brand.
39
40
Defensibility
Guest Experience Unit Economics Supply Demand Defensibility
Defensibility
We’re larger than all of our VC-backed competitors combined.
Competitor units from “Biggest Vacation Home Operator Moving Into City Market,” The Information, with extrapolated growth.
SA2019 goal from “Spokane-based Stay Alfred receives $47 million for expansion,” The Spokesman-Review.
1x
2x
4x
Total units Sonder vs Stay Alfred
$140mm
Raised
$62mm $22mm $19mm $9mm$16mm $2mm $5mm$14mm
The larger we are, the more we will leverage our scale to dominate
supply and demand...
Defensibility
Ubiquitous across top markets
Better tech and service
Strongest brand
Most attractive price
Best capitalized
Most operationally sophisticated
Best track record & relationships
Only bidder
Developers choose the strongest operator Guests choose the prominent brand
Supply
Capital
Marquee assets
More selection
Higher occupancy
More direct
Higher conversion
Better terms
Faster paybacks
More and cheaper asset financing
Better
experience
More operating
cash flow
Partner of
choice
Scale
economies
Growth Economics
Demand
...creating the
Sonder Flywheel.
Defensibility
We’re aiming to be the largest hospitality brand
in the world by 2025...
01
Need 4,100 new units per month.
02
Currently signing 800 units per month.
03
Requires going from 21 productive
cities to 105 productive cities at
the same city growth velocity.
Live Expansion
Defensibility
...and are uniquely positioned to take on three other trillion dollar verticals.
Defensibility
2020
Transform
traditional hotels
2021
Everything in
a Sonder is for sale
2022
Housing as a service
$500
$60
Sanjay Banker, CFO
B.S. in Economics from Wharton; M.B.A. from Harvard
Business School. Previously Partner at TPG Capital for 6 years;
Principal at Bain Capital for 8 years; Engagement Manager at
McKinsey for 6 years.
Phil Rothenberg, General Counsel
J.D. in Law from Georgetown; B.A. in Economics and
Foreign Affairs from UVA; M.I.B.S. from USC. Previously VP
of Legal at Tesla for 7 years; Attorney-Advisor at the U.S.
Securities and Exchange Commission; Adjunct Professor of
Law at Georgetown.
Martin Picard, VP of Finance and Global Head of Real Estate
C.P.A.; B.Comm. in Accounting from Concordia University.
Previously CEO of Adzura; Finance at Ned Davis Research; Senior
Financial Auditor at Deloitte.
Deeksha Hebbar, VP of Operations
B.S. in Economics and B.S.E in Engineering from Wharton and
the School of Engineering at the University of Pennsylvania;
M.B.A. from Harvard Business School. Previously, VP of
Business at Luxe; senior roles at McKinsey and Google.
Vivek Subramanian, VP of Product & Engineering
B.S. in Computer Science from BITS Pilani in India; M.S. from
the Univ of Texas at Austin; M.B.A. from UC Berkeley Haas.
Previously, SVP and Head of Product at Coupang; co-
founded CalmSea, a Big-Data startup; positions at Oracle
and Siebel.
Shruti Challa, VP of Revenue
B.A. in Economics and Political Science from Stanford; M.S. in
Predictable Analytics / Data Science from Northwestern.
Private Investor; GM / SVP - New Business & Strategic
Partnerships) at Rocketmiles (Booking.com subsidiary); Head of
Marketing and Sales Strategy at Groupon Rewards..
Melissa Lightbody, VP of People
Previously VP, Enterprise Business Operations &
Transformation Management Officer at Vituity; Sr Director, HR
at Trulia; VP, Global Head of People and HR Operations at
Machine Zone, Inc.
Arthur Chang, Senior Director of Expansion
B.S. in Hotel Administration from Cornell University.
Previously VP of International Development and Head of
Accounts at Coyle Hospitality Group; positions at Starwood,
Nikko Hotels, and InterContinental; co-founder of Soarigami.
Kiran Rao, Head of Supply Growth
B.S. in Finance from the University of Illinois. Previously worked
in corporate development at LinkedIn; VP at Campus Explorer;
Associate at Vicente Capital Partners; and Investment Banking
Analyst at BMO Capital Markets.
Marley Dominguez, Managing Director of Real Estate
B.S. in Accounting and Finance from Clemson University.
Previously, Managing Director at Apple Investment Group; VP
of Acquisitions for the Kuwait Pension Fund; headed real estate
acquisitions for the Royal Family of Abu Dhabi.
Ana Nekhamkin,Director of Real Estate Expansion - Europe
Summa cum laude from Wharton. Previously,Managing
Director at Inhabit; positionsin real estate acquisitions and
development for lifestylehotel companies such as Morgans
Hotel Group, Ian Schrager Company and Virgin Hotels.
Amrish Desai, Director - Investment Analysis & Research
B.S. in Finance from Boston University. Previously Director of
Research - New Developments at Compass; VP at JP Morgan;
Senior Underwriter at JP Morgan Chase.
Craig Rashkow, Sr. Director of Customer Service
B.S and M.S. in Engineering from Dartmouth; M.B.A. from
U Chicago Booth. Previously, Director of Sales Operations
at McMaster-Carr.
James Ondrey, Regional General Manager
B.A. in Finance from Miami University. Previously, one of the
first Uber GMs then Head of Midwest Operations at Uber;
CEO at SeatQuest; multiple investment banking roles.
Jeff Sun, Director of Operations - Supply Chain
B.A. in Political Science from Yale; M.B.A. from MIT Sloan School
of Management. Previously General Manager at Amazon
PrimeNow; positions at Deloitte, twoXAR, and Nike.
Julia Otis, Director of Interior Design Operations
B.A. in History of Art and Architecture from Brown, M.B.A
from Yale. Previously Global Design Operations at Airbnb Plus;
Head of Strategy and User Experience at True Link Financial;
Consultant at the Bridgespan Group; Paralegal
at the ACLU.
Laura Hoxie, Director of Hospitality
B.S. in Hotel Administration from Cornell; M.B.A. from
the University of Michigan Previously, Director of Guest
Experience at Hilton Worldwide; positions at Four Seasons
and Avero.
Mason Harrison, Director of Communications
B.S. in Political Science and Government from UC Davis. Previously
ran the political campaigns and/or represented John McCain,
Carly Fiorina, and Arnold Schwarzenegger; VP of Communications
at Crowdpac.
46
Team
Thank you

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Series D Deck | Sonder

  • 1. Building the future of hospitalitySeries D Deck
  • 2. We want to become the world’s largest and most loved hospitality brand
  • 3. Fastest growing segment of the global economy Millennials spend travelling Of travellers will be millennials Building the Future of Hospitality days per year35 by 202550% We travel more than ever before... annual growth5%
  • 4. Authentic experience Digital natives Social media friendly Can’t be $400 a night Building the Future of Hospitality ...and needs are changing.
  • 5. Travelers are forced to choose between two flawed options. Building the Future of Hospitality Hotels Soulless Only downtown Cramped rooms Antiquated service Slow internet 01 Individual Hosts Unreliable and inconsistent Not always clean Not always comfortable Spotty responsiveness Safety concerns 02
  • 6. We’re building the next generation hospitality company. 1900s Independent hotels 1950s Big box chains 2000s Peer to peer Tomorrow Tech-enabled brand Building the Future of Hospitality
  • 7. 1900s Independent hotels 1950s Big box chains 2000s Peer to peer Tomorrow Tech-enabled brand We’re building the next generation hospitality company. Building the Future of Hospitality
  • 8. 13 units・North Park $155 a night
  • 9. 111 units ・ CBD $151 a night
  • 10. 16 units・Covent Garden £181 per room
  • 11. 169 units ・ FiDi $225 a night
  • 12. $2.3b+ Assets under management 6,500+Units 71NPS (industry avg 37) 700+ Employees $200mTotal financing 100%Regulatory compliance 28 Markets 300,000+Guests hosted $313MExpected NTM Revenue We’re the market leader in tech- enabled hospitality.
  • 13. Guest Experience Unit Economics Supply Demand Defensibility Guest Experience
  • 14. “ We travel frequently with our friend group from all over the country and we found this amazing space... We had never stayed in a Sonder rental before but we will never stay anywhere else again if we have the option! Guest Experience We built an experience people love... Lynette WEST VIRGINIA 34 points above avg
  • 15. ...and made the it increasingly consistent. Guest Experience 01 Connected home initiative reduced access issues. 02 QA process implementation, dispatch app improvements, and third party housekeeping incentive plans allows us to identify even more minor issues before guests check-in. Guest issue rate
  • 16. We accommodated hundreds of thousands of diverse guests. Guest Experience From 163 Countries in Total Average Guests per Stay: 2.5 Average Daily Rate (ADR) per Bedroom: $129 Length of Stay: 4 days 23% Couple 33% Business 24% Family 14% Friends 6% Solo 260,000 guests to date TTM guests
  • 17. Guest Experience in a fantastic location A jaw-dropping space with seamless service What do they want out of a place to stay?
  • 18. Guest Experience Outstanding Spaces Exceptional style Designed for living Accommodating groups
  • 19. Guest Experience 41 7 30 45 138 24 96 36 51 14 76 21 Best Locations Walkable neighborhoods Lively & safe Large selection 10 186
  • 20. Guest Experience Mobile-First Service The lobby is on your phone Casual and personalized service No tipping and free, fast wifi
  • 21. Unit Economics Guest Experience Unit Economics Supply Demand Defensibility
  • 22. We transformed the hospitality operating model with technology. Unit Economics Hotel Operating Costs Operating Costs Services Messaging, not calling Centralized contact center Self-serve & automation (74%) Process Automation Check-ins Requests Operations Amenities On-demand services Partnerships
  • 23. Unit Economics We built a very strong business model. Cumulative cash flow by unit, assuming no future improvement Three unit economic levers 01 Improve revenue per available day. 02 Decrease direct costs. 03 Decrease location acquisition cost (LAC). ~10x ROI Note: Assumes CapEx refresh at year 6.
  • 24. Unit Economics In 2018 we completely transformed our unit economics. Annual Unit Contribution Location Acquisition Cost (LAC) Location acquisition cost payback (months) 2017 2018 Revenue Rent Direct Costs Contribution 6,284 9,206 2017 2018 CapEx Rent during Setup Security Deposit Rent Abatement Revenue Ramp-Up Total LAC 17,611 9,530
  • 25. Unit Economics Our markets are generating an increasing amount of contribution... Annualized contribution per unit ($) by market-cohort
  • 26. Contribution margin by market Unit Economics ...making all of our markets with over 100 live units profitable. EBITDA margin by market
  • 27. Supply Guest Experience Unit Economics Supply Demand Defensibility
  • 28. Supply Breakout growth started in Q3 2018... 6.2x 2828 01 Following our unit economics success, we turned our attention to growth and in H2 added supply that will generate 148M of annualized revenue. 02 Our productivity per person has increased from 7 to 30 units per month over the last 12 months. 03 Our average deal size is now 19 units (vs 5 units as of YE 2017), and we currently have 2,400 units signed or in lease negotiation for Q1. Units signed per quarter
  • 29. Fire & Safety Compliant with all local fire and safety requirements Zoning All new units are commercially zoned and eligible for hotel or transient licensing Supply We achieved 100% compliance by targeting under-construction supply that meets hotel standards. Insurance $10M in liability coverage Taxation Pay relevant tourism, value added and municipal taxes ADA Compliance with ADA guidelines in all non-exempt properties Inspections City staff available to assist regulators for periodic inspections
  • 30. Opportunities 296K 88K Completed units in top US cities in 2019 Supply We identified all developments in the US. Class A Buildings, Attractive Locations, and Correct Zoning
  • 31. We built a growth machine that delivers high quality and volume... Supply 01 Accurate Underwriting 02 Sound Investments 03 Predictable Conversion Brand standards Contribution margin Payback Risk LOIs sent 39% 91% LOIs signed Leases signed Lease Start Cohort Actual÷Forecast Goal
  • 36. Supply Strong value add compared to multifamily leasing Value add for developer relative to traditional multifamily use
  • 37. Demand Guest Experience Unit Economics Supply Demand Defensibility
  • 38. We surpassed 100M run rate with no direct marketing spend... Demand 01 Scalable and cost-effective distribution partnerships. 02 Great experience fuels 5 star reviews and high search ranks. 03 Brand awareness and repeats are translating into more direct bookings. 77% occupancy Revenue run rate ($M)
  • 39. Demand In 2019 we will finally lay the foundations for what will become an iconic consumer brand. 39
  • 40. 40 Defensibility Guest Experience Unit Economics Supply Demand Defensibility
  • 41. Defensibility We’re larger than all of our VC-backed competitors combined. Competitor units from “Biggest Vacation Home Operator Moving Into City Market,” The Information, with extrapolated growth. SA2019 goal from “Spokane-based Stay Alfred receives $47 million for expansion,” The Spokesman-Review. 1x 2x 4x Total units Sonder vs Stay Alfred $140mm Raised $62mm $22mm $19mm $9mm$16mm $2mm $5mm$14mm
  • 42. The larger we are, the more we will leverage our scale to dominate supply and demand... Defensibility Ubiquitous across top markets Better tech and service Strongest brand Most attractive price Best capitalized Most operationally sophisticated Best track record & relationships Only bidder Developers choose the strongest operator Guests choose the prominent brand
  • 43. Supply Capital Marquee assets More selection Higher occupancy More direct Higher conversion Better terms Faster paybacks More and cheaper asset financing Better experience More operating cash flow Partner of choice Scale economies Growth Economics Demand ...creating the Sonder Flywheel. Defensibility
  • 44. We’re aiming to be the largest hospitality brand in the world by 2025... 01 Need 4,100 new units per month. 02 Currently signing 800 units per month. 03 Requires going from 21 productive cities to 105 productive cities at the same city growth velocity. Live Expansion Defensibility
  • 45. ...and are uniquely positioned to take on three other trillion dollar verticals. Defensibility 2020 Transform traditional hotels 2021 Everything in a Sonder is for sale 2022 Housing as a service $500 $60
  • 46. Sanjay Banker, CFO B.S. in Economics from Wharton; M.B.A. from Harvard Business School. Previously Partner at TPG Capital for 6 years; Principal at Bain Capital for 8 years; Engagement Manager at McKinsey for 6 years. Phil Rothenberg, General Counsel J.D. in Law from Georgetown; B.A. in Economics and Foreign Affairs from UVA; M.I.B.S. from USC. Previously VP of Legal at Tesla for 7 years; Attorney-Advisor at the U.S. Securities and Exchange Commission; Adjunct Professor of Law at Georgetown. Martin Picard, VP of Finance and Global Head of Real Estate C.P.A.; B.Comm. in Accounting from Concordia University. Previously CEO of Adzura; Finance at Ned Davis Research; Senior Financial Auditor at Deloitte. Deeksha Hebbar, VP of Operations B.S. in Economics and B.S.E in Engineering from Wharton and the School of Engineering at the University of Pennsylvania; M.B.A. from Harvard Business School. Previously, VP of Business at Luxe; senior roles at McKinsey and Google. Vivek Subramanian, VP of Product & Engineering B.S. in Computer Science from BITS Pilani in India; M.S. from the Univ of Texas at Austin; M.B.A. from UC Berkeley Haas. Previously, SVP and Head of Product at Coupang; co- founded CalmSea, a Big-Data startup; positions at Oracle and Siebel. Shruti Challa, VP of Revenue B.A. in Economics and Political Science from Stanford; M.S. in Predictable Analytics / Data Science from Northwestern. Private Investor; GM / SVP - New Business & Strategic Partnerships) at Rocketmiles (Booking.com subsidiary); Head of Marketing and Sales Strategy at Groupon Rewards.. Melissa Lightbody, VP of People Previously VP, Enterprise Business Operations & Transformation Management Officer at Vituity; Sr Director, HR at Trulia; VP, Global Head of People and HR Operations at Machine Zone, Inc. Arthur Chang, Senior Director of Expansion B.S. in Hotel Administration from Cornell University. Previously VP of International Development and Head of Accounts at Coyle Hospitality Group; positions at Starwood, Nikko Hotels, and InterContinental; co-founder of Soarigami. Kiran Rao, Head of Supply Growth B.S. in Finance from the University of Illinois. Previously worked in corporate development at LinkedIn; VP at Campus Explorer; Associate at Vicente Capital Partners; and Investment Banking Analyst at BMO Capital Markets. Marley Dominguez, Managing Director of Real Estate B.S. in Accounting and Finance from Clemson University. Previously, Managing Director at Apple Investment Group; VP of Acquisitions for the Kuwait Pension Fund; headed real estate acquisitions for the Royal Family of Abu Dhabi. Ana Nekhamkin,Director of Real Estate Expansion - Europe Summa cum laude from Wharton. Previously,Managing Director at Inhabit; positionsin real estate acquisitions and development for lifestylehotel companies such as Morgans Hotel Group, Ian Schrager Company and Virgin Hotels. Amrish Desai, Director - Investment Analysis & Research B.S. in Finance from Boston University. Previously Director of Research - New Developments at Compass; VP at JP Morgan; Senior Underwriter at JP Morgan Chase. Craig Rashkow, Sr. Director of Customer Service B.S and M.S. in Engineering from Dartmouth; M.B.A. from U Chicago Booth. Previously, Director of Sales Operations at McMaster-Carr. James Ondrey, Regional General Manager B.A. in Finance from Miami University. Previously, one of the first Uber GMs then Head of Midwest Operations at Uber; CEO at SeatQuest; multiple investment banking roles. Jeff Sun, Director of Operations - Supply Chain B.A. in Political Science from Yale; M.B.A. from MIT Sloan School of Management. Previously General Manager at Amazon PrimeNow; positions at Deloitte, twoXAR, and Nike. Julia Otis, Director of Interior Design Operations B.A. in History of Art and Architecture from Brown, M.B.A from Yale. Previously Global Design Operations at Airbnb Plus; Head of Strategy and User Experience at True Link Financial; Consultant at the Bridgespan Group; Paralegal at the ACLU. Laura Hoxie, Director of Hospitality B.S. in Hotel Administration from Cornell; M.B.A. from the University of Michigan Previously, Director of Guest Experience at Hilton Worldwide; positions at Four Seasons and Avero. Mason Harrison, Director of Communications B.S. in Political Science and Government from UC Davis. Previously ran the political campaigns and/or represented John McCain, Carly Fiorina, and Arnold Schwarzenegger; VP of Communications at Crowdpac. 46 Team