Short-term accommodation provider Sonder Holdings in recent months has significantly reduced its portfolio, the apartment-style rental company announced Tuesday.
Additionally, Sonder said in a statement it had raised $10 million in funding commitments that would “improve the Company’s unrestricted liquidity.”
Sonder said that as of June 10 it had signed agreements to exit or reduce rent for 105 buildings, representing 4,300 units. Of those, Sonder has finalized exit agreements with 80 buildings, representing 3,200 units, and of those, the company already has exited 60 buildings, representing 2,300 units. Sonder said it expects to exit the remainder “throughout the remainder of 2024.”
According to Sonder’s third-quarter 2023 filing with the U.S. Securities and Exchange Commission, the most recent it has filed, Sonder at the end of September 2023 had about 11,800 units available for booking in more than 250 properties worldwide.
The company said it expects the moves to lead to “estimated annualized run-rate free cash flow improvements of over $40 million,” with termination fees of less than $20 million.
“Sonder’s business has shown remarkable resilience and we continue to take decisive action to optimize our cost structure and deliver sustainable positive free cash flow as soon as possible,” Sonder co-founder and CEO Francis Davidson said in a statement. “The confidence from our investors is a testament to the force of our global brand and the meaningful progress we have made to strengthen our financial foundation.”
Sonder hasn’t reported fourth-quarter 2023, full-year 2023 or first-quarter 2024 financial results, although it said its fourth-quarter revenue increased to about $164 million from $135 million one year prior. The company in March said it had delayed formal reporting due to non-cash accounting errors it had discovered. Nasdaq has issued a delinquency notice to the company.
