Proptech Startup HqO Raises $34M To Serve As A ‘Universal Remote’ For Office Buildings

Property technology (more commonly known as “proptech”) is a space that is increasingly attracting venture dollars.

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The latest recipient is HqO, a Boston-based tenant experience (TeX) platform for commercial real estate. The startup has just raised $34.25 million in Series B financing led by Insight Partners.

Previous backers Accomplice and Navitas Capital also participated in the round, which brings the company’s total venture raised since it was founded in early 2018 to $53 million.

It’s been nearly two years since HqO launched the first version of its software, and since that time it says it’s grown to managing 70 million square feet of office space. That’s impressive. And not just any office space, mind you. We’re talking about iconic buildings such as the 4.6-million-square-foot Willis Tower in Chicago, the second-tallest building in North America (once known as the Sears Tower). It’s currently working with 31 landlords including Blackstone’s EQ Office, Jamestown, DivcoWest, and National Development (up from six one year ago).

How it works

The company’s software gives office landlords, a  historically resistant-to-technology bunch, a way to unify all of an office building’s tenant-facing technology and amenities into a single SaaS platform. The platform also features content and events, and provides landlords with data aimed at helping them “increase tenant retention, differentiate the building to prospective tenants, and inform asset strategy.”

“Landlords are inundated with all these different point solutions, but they’re not going to ask a consumer to use 20 to 30 apps,” said HqO CEO and co-founder Chase Garbarino. “Our value proposition is to have an underlying platform that standardizes APIs across all categories so third-party technology can plug into one interface and landlords can control ownership with people in the building.”

HqO plans to use its new capital to double its headcount from 61 now to about 120 by the end of 2020 with an emphasis on engineering, sales and operations staff. It also plans to continue building out its platform, and expanding the number of markets it serves. Currently, the company has offices in Boston and New York, and recently hired its first people in Texas, London and Paris.

HqO charges a flat fee that ranges from five to seven cents per square foot annually. The model seems to be working so far. Its ARR has spiked by 1,507 percent compared to the end of last year, according to Garbarino.

“Most importantly, we’ve never lost a landlord or building, and over 50 percent of our customers have expanded with us,” he told me. “So in addition to negative churn, we’ve been very successful in helping landlords retain customers and lease up space.”

The company says it’s different from some other companies in the increasingly crowded space in that it provides the software but is “not an amenity curator.”

AJ Malhotra, vice president at Insight Partners, said commercial landlords are “increasingly cognizant of the returns they can generate by enhancing the office experience.”

Insight decided to back HqO, he said, “after an exhaustive examination of the landscape of TeX providers.” The firm was impressed by the company’s “technology,  passion and rapid growth.” The firm has also backed VTS, a leasing and asset management platform.

Another proptech startup that has raised money as of late is Biproxi​ a commercial real estate (CRE) transaction platform aiming to be the “Zillow of commercial real estate.” It recently raised $10 million in a seed round led by Greycroft.

Illustration: Li-Anne Dias