WeWork has been on a shopping spree as of late - with 5 of its total 7 acquisitions in the last 6 months.
Starting in June with the acquisition of Fieldlens, it’s hard to argue with the opinion that this acquisition made complete sense. A fast-growing commercial real estate firm decides to buy a software company that helps them manage the coordination and communication of renovation projects. With their aggressive expansion targets, it’s clear WeWork has to be incredibly efficient with their operations, especially in the renovation period.
As of December 2017, Fieldlens still operates as a separate company and hasn’t been incorporated into WeWork’s internal structure.
The M&A department at WeWork was busy last summer closing more deals including Spacemob and Udomy. The Spacemob acquisition wasn’t an unusual type of deal - WeWork simply took over a growing competitor from Asia to become a key player in this part of the world.
In October, Flatiron School,a NYC-based coding school, was acquired by WeWork. This move took some by surprise. However, if you look deeper into this investment you will notice clear synergies between the two businesses. Developers are most likely to work either for a startup or go freelance. This makes WeWork a good fit for them. Flatiron School creates an army of graduates that could potentially become WeWork clients in the future. Plus, it’s an opportunity to upsell Flatiron School services to existing WeWork residents. All in all, a win-win situation.
Udomy’s fate was different to these of Fieldlens & Flatiron School. The company has been swallowed by WeWork’s internal structure, ceasing to exist in September 2017. Udomy was a B2B sales and marketing intelligence platform which provided their clients with extensive lead and management tools. Having it in-house gives WeWork a competitive advantage when compared to other office providers. A recent example where Udomy played a significant role was a launch of the WeWork space in St Katherine's Docks, London. WeWork allegedly used Udomy to target startups based in local coworking spaces with a special offer on their new space.
WeWork’s M&A activities don’t stop with acquisitions. They do invest in other companies too. It has recently invested $32 million in The Wing, a women's coworking club and space. This deal looks like it is partially driven by a calculated effort to be a dominant player amongst co-working space providers as well as further aligning their brand objectives.
The end of November brought another acquisition. On the 28th November, Adam Neumann co-founder of WeWork, announced the acquisition of Meetup on the WeWork blog.
Killing two (or potentially three) birds with one stone
In the statement, Meetup said: “WeWork has space for community, and Meetup needs space for community. Voila!”. But, that’s only one side of the story.
WeWork, indeed, has a space in 17 countries that is mostly used during the week. Meetup’s users tend to organise and attend events on weeknights and weekends. However, the sheer number of people using the app constitutes an almost never-ending source of leads for WeWork. Plus, the company will surely attempt to create an additional source of revenue by renting out space for events and meetups.
Monetisation of the space after hours
Having a great space that sits empty a few hours a day is an opportunity. And WeWork is fully aware of it. Events and meetups are often utilised as marketing channels, and both small and large companies are prepared to spend their budget on an impressive event venue. WeWork event spaces are modern and attractive for hosts.
To some extent, WeWork has already been experimenting with events and working with partners to host external events. For example, back in 2016 and 2017, I organised a few events to promote the startup programme I was running that time. I approached WeWork London asking if I could get access to their event space for free. They agreed in exchange for sharing the data of attendees who expressed the interest in WeWork and a short intro to WeWork before the event kicked off. For WeWork it is a great source of leads that cost them a space that sits empty in the evening and the cost of wages of the cleaners that tidy up space after events.
This model could be easily replicated for Meetup hosts. When ready and the model is established, WeWork could start charging for event space.
Access to the right sort of audience
Meetup users are a specific breed of digital nomads. Often from a technology or business background, they get together at Starbucks, random bars or, in some cases, co-working spaces to network, meet like-minded people, develop friendships and alliances.
Meetup’s mission has always been concentrated on creating a bridge between the physical and digital world. If you look closer - this is similar to what WeWork is trying to achieve.
Here is the screenshot from the web analytics site SimilarWeb with some key metrics that helped justify the estimated $200 million investment that WeWork made in Meetup (the final price paid hasn’t been disclosed).
And here you have some traffic data for the WeWork website:
Look at the striking overlap between geographical locations where both websites’ users are located. For WeWork, Meetup’s users are potential leads that can be nurtured and converted into WeWork clients. WeWork also has the opportunity to build loyalty towards their brand through association to communities that Meetup users are part of.
Intelligence and rich-data source
Meetup’s user base is also a rich source of behavioural data. Users tend to leave bio information on the platform stuffed with keywords that can be analysed for trends. There is potentially even more value to be unlocked by looking at the popular locations of meetups advertised on the platform, their time and days, average number of attendees and frequency of meetups.
For instance, knowing that the two most popular meetup sizes are X and Y will allow WeWork to design spaces that accommodate this. The data will shape their products and services on the level only available to someone with the access to such a large data pool.
It will help WeWork to create spaces and experiences their potential clients will want to use. It will help to craft products their client will be prepared to spend money on. The services that not only grants access to the space that caters for their needs but also provides a sense of community and enables human interaction.