A Montreal-founded company that once promised to revolutionize short-term rentals shut down this week, leaving travellers worldwide scrambling for accommodations and marking the end of what was once considered a billion-dollar Airbnb competitor.

Sonder Holdings announced Monday, November 10, 2025 that it would wind down operations immediately and file for Chapter 7 bankruptcy, leading to a complete liquidation. The collapse came one day after Marriott International terminated what was supposed to be a 20-year licensing agreement, citing Sonder's financial troubles.

The speed caught everyone off-guard. Patrick M. D'Aoust was celebrating his anniversary at a Sonder property in Montreal when he received an email Sunday afternoon saying he needed to leave by 9 a.m. Monday. CNN reports the staff gave him 10 to 15 minutes to pack.

Years in the making

Sonder began in 2014 when co-founder Francis Davidson started managing apartments as a university student in Montreal. The company he built with co-founder Martin Picard positioned itself between traditional hotels and Airbnb through boutique-style accommodations with all-digital check-ins.

The problem was how Sonder chose to scale. Unlike Airbnb, where individual owners list properties, Sonder leased properties directly. This asset-heavy approach made the company highly leveraged, according to Nicolas Graf, a professor at NYU's Jonathan M. Tisch Center of Hospitality. "When you're not profitable, at some point, you run out of cash," Graf told the New York Times. "And that's what happened."

Sonder reached a valuation of more than $1 billion by 2019, racing toward an IPO and expanding quickly. Then came the pandemic. Travel collapsed while Sonder remained stuck with lease obligations across 40 cities. "What unfolded over the following few years was far worse than anything we'd seen in historical data, or ever imagined was possible," Davidson wrote last June. The company went public in 2022 anyway, carrying a $1.925 billion valuation. It never achieved profitability.

By 2024, Sonder was desperate. A licensing agreement with Marriott in August was supposed to provide access to Marriott's massive customer base—a lifeline for a struggling company. Instead, it became the final disaster. "Our integration with Marriott International was substantially delayed due to unexpected challenges in aligning our technology frameworks," said Janice Sears, Sonder's interim CEO. The technical failures caused significant costs and revenue declines.

Marriott terminated the agreement after barely a year. Without that partnership, Sonder had no path forward. The company explored financing options and potential buyers but couldn't secure capital.

The shutdown affected approximately 9,000 units across 40 cities. Connie Yang, who had prepaid for a 10-day New York stay, got notice to vacate by morning. David Klingbeil, halfway through a two-week booking, thought the email was a phishing attempt.

What began in Montreal as a vision for reimagining hospitality ended with locked doors across 40 cities worldwide.

"We are devastated to reach a point where a liquidation is the only viable path forward," Sears told Business Insider.

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How the Montreal-founded Billion-dollar Sonder Collapsed so Suddenly