Sonder, once hailed as one of the brightest stars in the short-term rental industry, has filed for Chapter 7 bankruptcy, marking a dramatic end to its meteoric rise.

The San Francisco–based company announced on Monday that it will begin winding down operations immediately and initiate insolvency proceedings in other countries where it operates. Interim CEO Janice Sears said the company had explored all alternatives to avoid bankruptcy – including a potential sale and efforts to secure new funding – but ultimately found liquidation to be the only viable option.

“We are devastated to reach a point where a liquidation is the only viable path forward,” Sears said. “We explored all viable alternatives to avoid this outcome, but we are left with no choice other than to proceed with an immediate wind-down of our operations and liquidation of our assets.”

The move comes just one day after Marriott International terminated its licensing agreement with Sonder, citing a default on the deal signed last year. The 20-year agreement – which created the “Sonder by Marriott Bonvoy” brand and integrated roughly 9,000 properties – had provided Sonder with $126 million in financing and was seen as key to stabilising the company’s finances.

Sears blamed “unexpected challenges in aligning our technology frameworks” for the collapse of the Marriott partnership.

The breakdown of the deal accelerated a financial decline that had been gathering pace for months. Sonder’s market value stood at just $6.79 million prior to Monday’s announcement – a stunning fall from its $2.2 billion valuation at the time of its 2021 initial public offering.

In recent quarters, the company had been plagued by liquidity issues, negative cash flow of $108 million, and multiple Nasdaq delisting warnings. It also faced a series of investor lawsuits after disclosing accounting errors in its 2022 and 2023 financial statements.

By mid-2025, Sonder reported $1 billion in assets but $1.5 billion in liabilities, warning of “substantial doubt” over its ability to continue operations. Reports last month suggested the company had been attempting to strike an out-of-court agreement with creditors to avoid bankruptcy – a plan that ultimately failed.