WeWork Acquires Managed by Q, Seeking to Expand Beyond Office Leases

By Tomio Geron 

WeWork Cos. has added another piece to its growing suite of services.

The shared office-leasing giant said Wednesday it agreed to acquire Managed by Q Inc., which runs a platform that office tenants can use to hire service providers such as cleaning crews, receptionists or IT support staff.

Financial terms weren't disclosed. The companies said WeWork is using cash and stock to buy Managed by Q, which was valued at $249 million in a financing round in January, according to PitchBook Data Inc.

Founded in 2014, New York-based Managed by Q previously raised about $85 million from venture firms including Alphabet Inc.'s GV, Homebrew and RRE Ventures.

For WeWork, also based in New York, the acquisition is another way to provide services beyond leasing office space. Managed by Q works mainly with medium and larger-size companies, an area of the market where WeWork wants to expand after building a customer base focused on smaller companies and large corporate customers, said Dave Fano, WeWork's chief growth officer.

WeWork has been busy in recent months making other deals as Chief Executive Adam Neumann seeks to branch out. In September the company bought meetings-management platform Teem LLC. In February it purchased Euclid Inc., which analyzes Wi-Fi usage to glean insight about how people use workspaces.

The company also owns Powered by We, which designs, builds and manages companies' office spaces.

WeWork's $47 billion valuation -- as of a January investment by SoftBank Group Corp. -- makes its shares go a long way as currency for acquisitions.

In a previous partnership, Managed by Q offered its services to mid-sized companies that are customers of WeWork's Headquarters by WeWork offering, which provides tenants with private, branded office space.

Some companies, including Greenhouse Software Inc. and Slack Technologies Inc., use multiple services from both WeWork and Managed by Q.

That overlap shows helped spur on the deal, Mr. Fano said, noting "really great mutual benefits from customers using Q software and services in WeWork buildings."

Managed by Q Chief Executive Dan Teran is staying on, and his company will remain as a wholly-owned separate entity, the companies said.

Managed by Q operates in New York, San Francisco, Los Angeles, Chicago, Boston and Silicon Valley, and it plans an aggressive expansion after the acquisition. WeWork doesn't have plans to roll out Managed by Q to all WeWork office spaces. Managed by Q will also continue to sell its services to non-WeWork customers.

"When we looked at the options to raise more capital and go independent or join with WeWork, we looked at this as the best way to realize our vision of the benefits we want to achieve for our clients," Mr. Teran said.

Write to Tomio Geron at [e-mail]

(END) Dow Jones Newswires

April 03, 2019 12:14 ET (16:14 GMT)

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