Industrious – a WeWork rival – Raises $80 in Latest Round
The coworking rival just raised money… but the bigger threat to WeWork is profitability in 2020
Industrious, a U.S. coworking firm, announced it has raised another $80 million in a recent Series D round. Since inception, the firm has raised $222 million in capital.
Even more important, the company claims it will be profitable during the first quarter of 2020. That’s important given the ugly S-1 released by rival WeWork as it plans to go public.
The world’s largest worksharing firm has faced ridicule over the last week on the idea that it might never be profitable (Bloomberg‘s Shira Ovide mocked WeWork as the “most magical unicorn” in a recent op-ed).
Industrious’ Focus on Partnerships
The six-year-old firm currently operates 80 locations in 45 cities. It now plans to bolster its international presence with new capital. But it is also placing a significant amount of focus on landlord partnerships with established businesses.
TF Cornerstone principal Jake Elghanayan discussed the company’s model in a press release annoucing the Series D.
“Industrious is among a new cadre of real estate companies pushing the traditional landlord-tenant relationship into a hybrid of service-provider and hospitality expert,” Elghanayan said.
The firm has a significant relationship with investor and tenant Equinox, which plans to manage gyms in flex office space.
Since its last capital raise in 2018, the company says its physical footprint has increased by 129%. In addition, it says that revenues are up 140% since last year. The company says it expects to be “profitable by the first quarter of 2020.”
Industrious investors include venture capital groups like Riverwood Capital Partners, Fifth Wall Capital and Wells Fargo Strategic Capital; real estate groups like Brookfield Property Partners and TF Cornerstone; and the Canada Pension Plan.
A Crowded Space
The announcement comes a day after Knotel, a different co-work-space operator, announced it had just compelted another $400 million in financing.
WeWork, meanwhile, plans to go public as soon as September 2019. It currently holds a valuation of $47 billion. Although it operates 528 workspaces in 29 countries, it has failed to run a profit after nine years. Its investors include the SoftBank Vision Fund.
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