Investors and analysts alike have been wondering whether coworking aggregator WeWork is a glorified real estate company or untapped tech company. Recently, WeWork has announced that it will begin selling its software product after acquiring Salt Lake City's Teem, an office management startup.
Unless you’re in charge of figuring out how conference rooms are booked for your employer, you probably haven’t heard of Teem. But the company, which WeWork paid $100 million for, according to two sources close to the deal, is a significant step toward the office-as-a-service future WeWork envisions for itself. Its customers include Airbnb, GE, and Viacom alongside a number of the buzzier Silicon Valley startups. Over the past year, WeWork has barrelled toward this diffuse business model as it has built up an enterprise consulting business: Maybe you’re a Fortune 500 company with a corporate campus that you already own, and you have no desire to move your employees into a millennial-filled coworking space with go-get-em slogans and beer on tap. WeWork still has something to sell you.
WeWork's argument that it’s a data-driven tech company, capable of selling a range of products and services beyond desk space, could become the ultimate hedge against the uncertain future of real estate. There are plenty of skeptics who say WeWork can’t possibly be worth more than the coworking stalwart IWG plc, which is valued at $2.1 billion in the public markets—about a tenth of WeWork’s current valuation. These analysts and investors suggest the company is just a middleman, securing large low-cost leases and re-leasing the space in the form of short-term memberships. They worry that if the economy turns suddenly, the company will be locked into numerous long-term leases while its membership numbers fall.
Teem will become part of WeWork’s fast-growing Powered by We consulting business, which aims to introduce WeWork as an office manager, able not just to provide millennial-chic coworking digs but also to redesign and manage existing offices. Through its coworking business over the past eight years, WeWork has amassed a huge amount of office space and studied how thousands of different businesses operate within it.
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