WeWork has announced its latest acquisition, with plans to snap up on-demand workspace provider Spacious.
WeWork has been in headlines more or less non-stop since it announced heavy losses in its latest quarter. These losses amounted to $219,000 every hour of every single day, according to Business Insider.
Meanwhile, competition in the co-working space in increasing. Just last week, WeWork competitor Knotel raised $400m in funding, bringing the company to a valuation of $1bn.
WeWork is valued at $47bn – a figure that has left many industry commentators baffled. Although there’s a stark contrast between both companies valuations, Knotel has big ambitions to overtake WeWork.
Knotel CEO Amol Sarva has been adamant that his company will prevail in the co-working war. Last week he told Bloomberg: “In 18 to 24 months, [WeWork] will be behind us. It’ll be like eBay and Amazon, Myspace and Facebook.”
While WeWork has apparently been haemorrhaging money, the company is still investing in properties and making acquisitions left, right and centre. According to Crunchbase, WeWork has acquired 18 companies to date, with several deals this year.
The latest acquisition is Spacious. On Tuesday (27 August), WeWork announced that it’s set to acquire the on-demand workspace provider.
New York-based Spacious, which was set up in 2016, enables landlords and restaurants to rent out their unused spaces to workers during the day before opening to customers in the evening. Users can purchase a $20 day pass, a monthly membership, a quarterly membership or an annual membership.
WeWork did not disclose the financial terms of the deal, but Spacious was last valued at $29.1m in May 2018, according to Pitchbook. Since it was founded, the company has raised $9m in private funding.
While the acquisition may seem small, in an interview with Fortune, DA Davidson’s Barry Oxford commented: “Imagine what WeWork will be able to do as far as marketing this and rolling this out on a huge scale.”
In a blogpost about the acquisition, WeWork said: “Spacious has partnered with landlords to make the most of their street-level real estate, creating a network of conveniently located drop-in workspaces in New York City, where people can walk in and get work done.
“Spacious’s offerings range from day passes to annual memberships, providing easy access for everyone from remote workers to Fortune 500 employees.”
WeWork’s chief product officer, Chris Hill, said: “Spacious’s team and real estate and operational expertise will help enable WeWork to continue to give our members access to the workspace they want, when they need it. We’re thrilled to welcome Spacious to WeWork.”
Despite the criticism WeWork has drawn from commentators and those concerned about the sustainability of its business model, the company reportedly has a 71pc market share in the US flexible operator leasing space.