Flex Space Operator Industrious Goes Global with Two Acquisitions

Flex space operator Industrious announced two acquisitions in a $100 million deal, which add about 1 million sq. ft. of current and pipeline locations in Singapore, Hong Kong, Thailand, France, Belgium, and The Netherlands.

One of the two acquisitions is Singapore-based The Great Room, which has been operating since 2016 as a “hospitality-led premium coworking space operator.” It offers larger allocations of space for fast-growing companies or hot-desking environments for entrepreneurs.

The other acquired company is Welkin & Meraki, which also offers premium positioned flex spaces in Europe through five addresses.

Although the underlying concept is decades old, flex space companies have been growing in importance and perception through the attention WeWork garnered and then through the pandemic. As time has not solidified how the workspace will appear in the future—how many people in the office, how many at home, how many in a hybrid approach—flex space has become one component of the bet companies and investors are making in the office sector of the CRE industry.

As Industrious said in its release: “The deals will allow Industrious to better capture the growing global demand for experience-driven, flexible space from occupiers of all sizes. Motivated by employee demand for greater work flexibility, companies are increasingly leveraging workplace-as-a-service platforms to best support and engage hybrid and distributed teams.” The company also expects to double its international presence by the end of 2022, although whether through additional acquisitions or organic growth of its acquisitions, the company did not say.

Expansion could serve a number of functions, including expanding scale to attract potential customers and also investment money—or mindshare if the company goes public as an exit for its institutional investors—and market diversification to offset geographic disparities and shifts in workplace trends.

That expansion also goes on domestically. Industrious claims presence in more than 120 locations in 50 markets across the US. The company says that its client base includes a range of company sizes from startups to Fortune 500.

According to startup data site Crunchbase, the company has obtained $422 million in funding since 2016. The latest round was in early 2021 when CBRE invested $200 million for a 35% stake and, at the time, expected to buy an additional 5%, and transferred its own flex space brand, Hana. As a result, Industrious has had a UK presence since then, as Hana worked there as well as the US.