Commercial real estate firms Cushman & Wakefield, JLL and DivcoWest are betting on a “tenant experience” startup to help get workers back to their offices.
Boston-based HqO said Wednesday that it closed a $60 million Series C. Cushman was a new investor in the company, along with Suffolk Capital and PruVen Capital. Prior backers JLL, DivcoWest, Accomplice, Insight Partners, Navitas Capital, Allegion Ventures and the Pagliuca family office also participated. The round brings HqO’s total funding to $106.9 million.
HqO was founded in 2018 by Kevin McCarthy, Chase Garbarino and Greg Gomer, who previously started AmericanInno, a digital events business acquired by Advance Publications in 2015.
HqO’s software platform gives landlords the ability to manage tenant-facing tech and amenities in one place. It also has a tenant app, analytics tool and marketplace.
In a statement, Garbarino, HqO’s CEO, said the round comes with strategic partnerships with commercial real estate players. That network will set up HqO “for unprecedented growth as the world returns to offices,” he added.
The U.S. office vacancy rate rose to 17.7 percent at the end of 2020, compared to 16.8 percent at the end of 2019, according to Moody’s and CWCapital. In New York City, asking rents fell by 1 percent and effective rents by 2.4 percent. Moody’s has predicted the market will suffer for another three years before starting to ease in 2024.
HqO manages more than 150 million square feet, and the company said it tripled its revenue over the past 12 months. The new financing will allow it to expand in existing markets, including Boston, New York, London and Paris. It also plans to launch in cities on the West Coast and in Toronto.
Its 60 commercial clients include Columbia Property Trust, Vornado Realty Trust, Jamestown L.P. and Hudson Pacific Properties.
In a statement, Insight Partners’ AJ Malhotra said HqO helped landlords and managers “adjust to the challenges of the pandemic” as many grappled with questions of how and when to reopen offices.
HqO isn’t the only one building so-called tenant experience apps. Office-leasing startup VTS said last month that it planned to buy Rise Buildings, an app to monitor workplace movement, for $100 million. The Chicago-based startup is used in 350 buildings spanning 130 million square feet of space.
Toronto-based Lane raised $10 million in May. The startup has an app to facilitate deliveries, book event space, handle maintenance requests and communicate with tenants.