New York based meeting space arrangement startup Convene has announced a $152 million Series D led by ArrowMark Partners. This new infusion of funding vaunts the company as one of the more serious competitors to coworking space superstar WeWork.
Unlike WeWork, which rents out work space to individuals and companies, Convene targets enterprise customers. It partners directly with property owners to transform their meeting and workspace. Barclay’s, Comcast, and Ernst & Young are among its customers. Locations are spread across Boston, New York City, Philadelphia, Washington D.C., and Los Angeles, among other areas. Convene covers 700,000 square feet of office space.
Although WeWork is expanding on a global scale with projected yearly revenue of $1.7 billion, it has been burdened by signing leases and discounts for members, which, among other expenses, created $934 million in net losses last year. Convene also represents a potential threat to WeWork’s own attempts to woo enterprise customers, which is making up a larger portion of its coworking base, according to ReCode.
In the meantime, will direct partnerships with real estate companies save Convene the trouble of cutting costs from leases and memership discount？The answer is positive, at least from the company’s press release.
“This landlord-partnership model helps make Convene highly profitable,” wrote company spokesperson Brian Levin in a press release email. “Convene gets 50% of its revenue from companies doing over $1B in revenue and/or more than 1,000 employees.”
The $152 million Series D is more than double of the company’s $68 million Series C in 2017, pushing its total funding to $265.5 million. Convene plans to use this new funding to expand their alliance with landlords and add another 10 locations by the end of the year.
Illustration Credit: Li Anne Dias