Today’s article in the Globe and Mail about Sonder, the San Francisco based travel company tells a great story. Founded in Canada in 2012, they moved quickly to the US where 90% of their 560 or so employees now reside. (Employee data from LinkedIn.) They are heading to $400 million in sales this year and just raised a $210 million US D round of capital (CBInsights). So far they’ve raised $340 m US and are officially a Unicorn. In Narwhal List terms, Sonder has a Financial velocity of 48. This is 39% higher than Canada’s leading tech Narwhal, Element AI which has a Financial Velocity of 35.
If you paid attention to our latest research summary, you’ll see why we think they are doing it right. First of all, they are in a horizontal consumer market. This is where all sorts of strong growth is possible. Secondly they are amassing copious amounts of capital. With last year’s revenue of about $200 million they now have 1.7 times as much capital as revenue. They have employee growth of 94% in the last year and 244% in the last two. This is exactly the growth they need to propel them towards an IPO.
Why this is great for Canada
You may be asking why I think this is a great Canadian story. After all, they are now based in San Francisco. It is sad that Sonder had to move south to be successful. But it’s great because it shows that we can create good ideas here and have the entrepreneurs to propel them to glory. It’s great because Sonder is now about to bring a second headquarters back into Canada and that’s a place where we can incubate new talent. Most of all, we’ll be building employees with the experience of working in fast growing companies and that can only be good for our ecosystem.
If we get enough of these stories, the Shopifys and Sonders, we will eventually have enough anchor companies around which a more successful ecosystem can flourish.