Industrious, one of the leading coworking providers that counts WeWork and IWG’s Regus among its rivals, is taking steps toward an initial public offering, which may be announced as soon as spring of next year.
The New York-based startup has interviewed investment banks ahead of a potential listing in the spring or summer of 2021, although that timing could change, CEO Jamie Hodari said.
Industrious, which raised $80 million last year from investors including Brookfield Properties, Canada Pension Plan Investment Board, and Equinox, expects revenue growth of as much as 25 percent this year, Hodari said in a recent interview.
Though Hodari declined to comment on the company’s valuation, experts in the flexible office space arena said Industrious is expected to be worth well over $500 million in any listing.
In May, the company cut about 90 employees, roughly 18% of its workforce, in response to the impact of COVID-19. But Industrious has begun the process of bringing back its 64 furloughed employees, all of which are expected to be back by next month, sooner than expected, Hodari said. Temporary salary cuts—including his own—are expected to be reversed by this summer.
Industrious is poised to benefit from a push toward suburban offices as companies seek close-to-home outposts for their employees, Hodari said in the interview.
“Rather than open-plan coworking desks, we focus on private offices, which are more aligned with what customers are looking for, at least until there’s a vaccine,” he said.
This decision, which was made in 2019, to pivot away from leases and adopt more revenue-sharing agreements with landlords has helped the workspace provider weather the pandemic, according to Hodari.
“We’re a more sustainable, stable business in a time of macroeconomic turmoil, and it’s great to have control over our own destiny,” he said.
The company has also weathered the pandemic by developing a full-scale COVID-19 response program called Continuous, which is designed to deliver sustainable work-from-home solutions while also helping companies prepare for their eventual return to the workplace.
Industrious members can access free or discounted services to support their day-to-day work and life, including free professional online counseling with a licensed therapist through BetterHelp; online access to doctors and health coaches through Parsley Health; and functional music developed by scientists to support concentration, relaxation, and sleep through Brain.fm.
“Industrious is a company that will go to the ends of the earth to make things a little better for our members, and our partners in Continuous share our belief that this commitment only grows stronger when times get tough,” said Hodari. “Since the pandemic began, we’ve continually engaged with members to identify how to make the most of working from home, and these partnerships reflect those discussions.”
For the flexible office industry as a whole, Industrious’ impending IPO is a good sign—although coworking spaces were initially impacted by the pandemic in unprecedented ways, the industry has already experienced recovery in certain markets, especially in APAC. Especially in European countries where business shutdowns were not enforced, coworking spaces have seen steady numbers and even growth.
With Industrious plotting an IPO, it can be assumed that the workspace provider is making plans to capitalize on the rising amount of remote workers, with certain reports predicting up to 30 percent of the global workforce will be working from home multiple days a week by the end of 2021. Flexibility is the way of the future, which means the future looks bright for coworking.