WeWork Acquires Managed by Q, Seeking to Expand Beyond Office Leases
April 03 2019 - 12:29PM
Dow Jones News
By Tomio Geron
WeWork Cos. has added another piece to its growing suite of
services.
The shared office-leasing giant said Wednesday it agreed to
acquire Managed by Q Inc., which runs a platform that office
tenants can use to hire service providers such as cleaning crews,
receptionists or IT support staff.
Financial terms weren't disclosed. The companies said WeWork is
using cash and stock to buy Managed by Q, which was valued at $249
million in a financing round in January, according to PitchBook
Data Inc.
Founded in 2014, New York-based Managed by Q previously raised
about $85 million from venture firms including Alphabet Inc.'s GV,
Homebrew and RRE Ventures.
For WeWork, also based in New York, the acquisition is another
way to provide services beyond leasing office space. Managed by Q
works mainly with medium and larger-size companies, an area of the
market where WeWork wants to expand after building a customer base
focused on smaller companies and large corporate customers, said
Dave Fano, WeWork's chief growth officer.
WeWork has been busy in recent months making other deals as
Chief Executive Adam Neumann seeks to branch out. In September the
company bought meetings-management platform Teem LLC. In February
it purchased Euclid Inc., which analyzes Wi-Fi usage to glean
insight about how people use workspaces.
The company also owns Powered by We, which designs, builds and
manages companies' office spaces.
WeWork's $47 billion valuation -- as of a January investment by
SoftBank Group Corp. -- makes its shares go a long way as currency
for acquisitions.
In a previous partnership, Managed by Q offered its services to
mid-sized companies that are customers of WeWork's Headquarters by
WeWork offering, which provides tenants with private, branded
office space.
Some companies, including Greenhouse Software Inc. and Slack
Technologies Inc., use multiple services from both WeWork and
Managed by Q.
That overlap shows helped spur on the deal, Mr. Fano said,
noting "really great mutual benefits from customers using Q
software and services in WeWork buildings."
Managed by Q Chief Executive Dan Teran is staying on, and his
company will remain as a wholly-owned separate entity, the
companies said.
Managed by Q operates in New York, San Francisco, Los Angeles,
Chicago, Boston and Silicon Valley, and it plans an aggressive
expansion after the acquisition. WeWork doesn't have plans to roll
out Managed by Q to all WeWork office spaces. Managed by Q will
also continue to sell its services to non-WeWork customers.
"When we looked at the options to raise more capital and go
independent or join with WeWork, we looked at this as the best way
to realize our vision of the benefits we want to achieve for our
clients," Mr. Teran said.
Write to Tomio Geron at tomio.geron@wsj.com
(END) Dow Jones Newswires
April 03, 2019 12:14 ET (16:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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