The fallout of WeWork’s first attempt at going public and the ousting of its outspoken co-founder Adam Neumann are by now well known, as are the serious losses that the company caused for its venture capitalists like SoftBank.
Since going public via a SPAC merger last year, WeWork is still operating at a deficit and reported a net loss of over $844 million in the third quarter of 2021.
For the company’s real estate partners like New York-based Rudin Management, which leased approximately half a million square feet to WeWork so they could build coworking offices, it is unclear whether or not WeWork has kept up with its payments.
Though its original investment in WeWork may have imploded, Rudin Management’s venture investing arm, Rudin Ventures, is taking another chance on coworking. According to Fortune, Rudin Ventures announced it is joining a $9.6 million seed funding round for Daybase, a startup consisting of seven ex-WeWork employees that want to create and scale a new hybrid coworking company.
CEO Joel Steinhaus, COO Doug Chambers, and Daybase’s other co-founders—all of whom worked for WeWork’s enterprise business and catered to its larger clients—plan to use the funding to build out technology, hire more corporate staff, and launch a hybrid workspace model that will target the suburbs.
Rudin is one of three real estate companies that are investing in Daybase, alongside the VC firms True Ventures, Company Ventures, and Good Friends.
“Working from home was not a uniform experience for everyone,” Steinhaus told Fortune. “I think the pandemic created a clear need for a third place… between going into a hub office and working from home.”
In January, the startup opened its first location in Hoboken, New Jersey and plans to target ground-floor retail spaces within densely populated neighborhoods. Rather than operating in urban city centers, the Daybase team wants to focus on residential areas where commuting is hard.
Unlike WeWork, Daybase has received approval to be a franchisor, offering local entrepreneurs the opportunity to front the capital and be in control of a space while paying Daybase a licensing fee for use of their marketing and branding, floor plan models, and technology.
In addition to Hoboken, Daybase is aiming to open two more spaces in Westfield, New Jersey, and Harrison, New York by the end of 2022. In the next 12 to 14 months, the startup will then begin opening franchise locations.
Currently, the new coworking company has close to 300 members. Professionals wanting to use Daybase can either walk in or pay for a membership, which starts at $50 per month and includes access to coffee, tea, and general coworking. For $199 per month, members gain credits to use for meeting rooms and dedicated desks.
Daybase will join already-established franchise coworking companies such as International Workplace Group (IWG) and Office Evolution, which have found success in this model. Hopefully, the startup’s alternate capitalization model will lead to sustainable growth with former staffers of WeWork’s successful enterprise segment leading the way.