When COVID-19 struck, safety and wellbeing services provider Sonder saw its revenue dry up overnight. Its founders explain how they persevered to grow their business sixfold.
Peter Burnheim and Chris Marr MAICD were members of the Australian Defence Force Academy when they met in 1999. Both were selected for the Special Forces, but were never on the same rotations, rising through the ranks in parallel.
As a young cavalry troop commander in Iraq, Burnheim commanded a troop supporting Australia’s diplomatic mission in Baghdad and another aiding the Japanese-led reconstruction in southern Iraq.
“There’s no greater privilege than leading Australian soldiers in overseas operations,” says Burnheim, chief operating officer of safety services provider Sonder. “It’s a high-threat environment and it’s amazing how transferable many of the skills are. This includes an ability to make decisions with incomplete information and to manage risk.”
In 2007, Burnheim and Marr were posted to Perth, where they met Craig Cowdrey, a member of the Army Reserve and a corporate lawyer at Clayton Utz. He subsequently became a diplomat and undertook a long-term posting to Hong Kong.
The trio resolved to set up a purpose-driven company that could leverage their unique skillsets. They identified a gap in the market around the provision of personal safety and envisioned the benefits of applying military procedures to support civilians in different professional settings.
“Anyone can call triple zero, but it’s quite a high threshold,” says Burnheim. “A basic premise of the military is that if you’re sending someone into a high-threat environment, they will carry out their duties more confidently if they know that they are a phone call or radio communications away from someone who can send in support. The same thing applies to a mobile worker travelling on their own, potentially going into risky situations.”
Cowdrey left the Department of Foreign Affairs in 2016, while Marr and Burnheim began to use their long service leave as they transitioned out of the army to establish Sonder. After launching in 2017, Sonder’s initial focus was on personal safety services for mobile workers and international students. If a student felt unsafe, they could press a button for immediate support. A qualified responder would be sent to them if they'd consented to their location being shared.
The founders began to recognise the merit of a broader offering. “We were noticing when we were supporting people in a crisis, we kept rubbing up against mental health issues,” says Burnheim.
Revenues dry up
When the pandemic lockdowns began in 2020, Sonder’s end-user base of international students disappeared virtually overnight as a result of international border closures. COVID-19 restrictions meant that mobile workers could no longer go out into the field and were working remotely. Sonder’s revenues collapsed. A decision was made to stand down 40 per cent of its workforce. The rest were asked to take a 20 per cent pay cut.
“While a clearly necessary decision, it was a personally and professionally challenging one to carry out — but doing so gave us the time and space to consider options and then implement a deliberate plan to pivot the business,” says Cowdrey, now Sonder’s CEO.
In 2020, the company formed a partnership with Woolworths Group, whose staff at distribution centres, in-store and on the road were facing unprecedented stressors as they tried to provide items that were suddenly in short supply.
“In many ways, the pivot brought about by the pandemic was probably the best thing that ever happened to us because it provided an impetus to bring in a clinical capability through qualified nurses and medical oversight,” says Burnheim.
Sonder ensured it had the right market fit through further sales and market testing. “We got confidence in our enhanced offering as sales increased and we started to receive exceptional feedback from our growing customer and member base,” says Cowdrey.
Good governance
Marr, Burnheim and Cowdrey are on the board, alongside angel investor Scott Bailey and Blackbird partner Niki Scevak. Observers include investors Cliff Rosenberg MAICD, Karen Chan GAICD and Damian Wodak.
“We love engaging with our board, observers and other advisers because we’re conscious this is our first time as founders,” says Burnheim. “We bring a lot of unique skills and experience to the table, but we’re humble enough to know that the opportunity to learn from the best minds across the Australian business landscape is incredibly valuable.”
High standards
Sonder is a comprehensive platform that enables companies to provide mental health support, medical advice and safety services to their employees. Its network of physical responders can quickly assess complex and varied scenarios that include workplace aggression, injuries, domestic violence, accidents and suicidal ideations. Its support centre in Sydney is staffed 24/7 by emergency services professionals and qualified nurses in the fields of safety, medical care and mental health. In 2021, Sonder became the first technology company to be accredited by the Australian Council on Healthcare Standards. The organisation uses a rapid triage process to holistically assess and connect people with the right support at the right time. Its objective is to lower existing barriers to care for the 600,000 employees who rely on it across Australasia.
“Managing your own wellbeing in today’s world is a real challenge, as the landscape is so complex,” says Burnheim. “Our solution is to provide a more holistic category of care.”
He stresses Sonder is not an employee assistance program (EAP) — but it can [complement] one. “EAPs serve a purpose, however, their way of supporting individuals is quite antiquated and reactive,” he says. “Many EAP providers are not 24/7 and they rely on the individual knowing exactly what they need.”
The ongoing challenge with EAPs is getting employees to use them, according to Max Meyer, investment associate at Sydney-based venture capital firm Blackbird Ventures, which is an investor in Sonder. “Sonder’s end-to-end wellbeing offering has 20 times better employee engagement than traditional EAPs,” says Meyer.
One of the company’s strengths is that it is digital-first, with high levels of personalisation. Ninety per cent of its interactions are via chat platforms, but 24/7 human-led support is available.
Going global
The company founders had global ambitions from the beginning, and they are on the cusp of realising them. In September 2022, Sonder closed a $35m Series B funding round, led by Blackbird Ventures, as a means of entering the UK market. Other investors included SEEK Investments, SecondQuarter Ventures and MA Growth Ventures.
“The UK market is three times bigger than Australia and jurisdictionally similar,” says Burnheim. “The UK is going through some real challenges as a result of cost-of-living pressures and pressures on the NHS (National Health Service). There is a visceral need for employers to provide a better wellbeing platform to their employees.”
Sonder is finalising its General Data Protection Regulation (GDPR) compliance requirements, which the team says was straightforward as it was already largely compliant. “Happily, because of the rigour we’ve put into meeting the standards in Australia, the ability to transfer those standards has been done quite quickly,” says Burnheim. “We had to make a few tweaks around how we articulate our privacy policy to end users.”
Meyer says the founders’ military background shines through in the company’s operational resilience. “The magic is their ability to run Sonder with the rigour of a publicly listed company, while maintaining an ever-increasing product ambition. They execute at the pace of a highly motivated entrepreneur. Sonder’s ability to withstand their primary revenue source being removed when COVID-19 hit, then grow the business sixfold in two years, is a testament to the calibre of the team.”
This article first appeared under the headline 'Rapid Response’ in the November 2023 issue of Company Director magazine.
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