The recent buzz around office space-leasing startups makes it easy to forget that flexible workspaces date back to the previous century. Consider that Sydney-based Servcorp, with locations in 54 cities, has provided office space with flexible terms since 1978. Regus, a Luxembourg-based provider of flexible office space, has locations in 900 cities. In December 2017, its holding company, International Workplace Group, or IWG, received a bid approach from two Canadian companies: private equity firm Onex and the private equity division of investment firm Brookfield Asset Management. (Takeover discussions ended as of early February.)
Although the idea of flexible workspace isn’t new, the investment fervor around it is. In 2017, the industry received more than $4 billion in U.S. funding—but without WeWork, that figure would only be in the millions. Founded in 2010, WeWork has more than 280 office locations around the world. In July 2017, it raised $760 million in new capital. One month later, it received $4.4 billion from SoftBank’s $98 billion tech-focused Vision Fund. With a valuation of $21 billion, WeWork is the third-largest U.S. startup, behind Uber and Airbnb, according to PitchBook.
Last year, WeWork launched its first co-working space in India, but it’s not the only business catering to the country’s office needs. Awfis Space Solutions, a co-working startup in India, raised $20 million in 2017 from Sequoia Capital India.
WeWork has also played the role of investor. That includes leading a $32 million round of funding for The Wing, a women-only co-working space with amenities such as lactation rooms and hair blowouts on demand. WeWork has also made at least one curious investment—in 2017, it reportedly purchased a large stake in wave-pool-maker Wavegarden.
With 34 U.S. locations, the co-working company Industrious received some investment in recent years too. In September 2016, it raised $37 million in Series B funding, led by private equity firm Riverwood Capital—and in March 2017, Industrious received an additional $25 million in new capital.
This story originally appeared in the March/April 2018 print edition of Middle Market Growth magazine. Read the full issue in the archive.
S.A. Swanson is a business writer based in the Chicago area. She frequently covers technology.