Co-working firm Industrious, which recently inked lease in DTLA, raises $37M

Los Angeles /
Sep.September 13, 2016 04:01 PM

From the New York website: Brooklyn-based co-working company Industrious, which recently inked a lease at Onni’s 600 Wilshire in Downtown Los Angeles, raised $37 million in a Series B funding round, the startup announced Tuesday.

Riverwood Capital led the round, which also included Outlook Ventures and Maplewood and brought Industrious’ total funding to $51 million to date.

Industrious is one of a handful of firms looking to challenge $16 billion behemoth WeWork in the nascent co-working industry. The firm’s co-founder and CEO Jamie Hodari told The Real Deal that it plans to spend the bulk of its new funds on building out and opening new co-working spaces across the U.S. It currently runs a dozen spaces, and wants to add 12 more.

Unlike most of its peers, Industrious chose to expand to different cities before growing within New York and has locations in places like Raleigh, St. Louis and Minneapolis. Meanwhile, its competitor The Yard has nine locations in New York and only one outside (in Philadelphia).  WeWork, which currently claims to have 112 spaces in 33 cities around the globe, also started off by opening several locations in New York before venturing out to new markets.

Hodari pointed to the competitiveness of New York’s co-working market — where dozens of firms fight for market share — and to the potential benefit of being present in different cities.  “There’s enormous advantages to scale,” he said, arguing that customers value the ability to find offices in places they travel to. He also argued that being in different cities gives it a better handle on what customers there want, making it easier to grow later on. “You might scale vertically in one market to a very large scale, and then it’s very hard to say to investors whether you’ll succeed in Cleveland,” he said.

Prior to founding Industrious, Hodari ran Kepler, a nonprofit university for developing countries. The other co-founder, Justin Stewart, is a former vice president at Madison Realty Capital [TRDataCustom] and served as director of acquisitions for Windham Development.

Industrious seeks to set itself apart by appealing to more “mature” (in the words of Hodari) tenants — companies that prefer a quiet office suitable for corporate meetings, rather than a common beer keg. In practice, this means Industrious has kept its spaces far smaller than the average WeWork (its Brooklyn location on Dean Street totals less than 20,000 square feet), which it claims makes them more quiet.

“I would say if you look at a lot of our competitors, the look and feel is appealing to a very different sense of style,” Hodari said, “something that is noisy and loud and exciting.”


Related Articles

arrow_forward_ios
Granite CEO Michael Dardick and Industrious CEO Jamie Hodari

Industrious partners with landlords to offer tenants satellite workplaces

Industrious partners with landlords to offer tenants satellite workplaces
Aerial photo of the Pacific Design Center (Credit: felixmizioznikov/iStock)

Here’s what WeWork and other tenants pay at 1.4M sf Pacific Design Center

Here’s what WeWork and other tenants pay at 1.4M sf Pacific Design Center
Adam Neumann and the home (Credit: Jackal Pan/Visual China Group via Getty Images and Zillow)

Adam Neumann listing Bay Area “Guitar House” for $27.5M

Adam Neumann listing Bay Area “Guitar House” for $27.5M
Onni Group President Rossano DeCotiis, WeWork CEO Sandeep Mathrani, and Wilshire Courtyard

Onni Group defaults on $400M Wilshire Courtyard loan after WeWork lease amendment

Onni Group defaults on $400M Wilshire Courtyard loan after WeWork lease amendment
Los Angeles skyline (Credit: iStock)

LA office leasing drops in Q4 amid WeWork, tech sector pullback

LA office leasing drops in Q4 amid WeWork, tech sector pullback
CBRE CEO Robert E. Sulentic, and Keller Williams Founder Gary Williams with the Lantana property

Keller cries foul: Brokerage sues CBRE over WeWork lease deal

Keller cries foul: Brokerage sues CBRE over WeWork lease deal
1200 W. 7th Street and 5750 Wilshire Boulevard (Credit: Google Maps)

Here are LA’s biggest office leases of 2019

Here are LA’s biggest office leases of 2019
From left: Hiten Samtani, Bridgid Coulter of Blackbird, Kat Lau from Industrious and Jim Doorne of IWG

What’s next for the co-working business?

What’s next for the co-working business?
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...