WeWork Sells Managed by Q Platform to Eden
Eden bought rival Managed by Q from WeWork, beating out a reported bid by Managed by Q’s co-founder Dan Teran.
By Nicholas Rizzi March 3, 2020 2:32 pmreprints
San Francisco-based office management startup Eden bought rival Managed by Q from WeWork, beating out a reported bid by Managed by Q’s co-founder. The sale comes less than a year after the beleaguered coworking giant picked up the company.
Eden bought the New York City-based Managed by Q from WeWork for an undisclosed price in a deal that finalized today, according to Eden CEO and co-founder Joe Du Bey. The company also closed on a $29 million Series B1 round, led by JLL (JLL), to help fund the purchase. (Du Bey said that the size of the round didn’t reflect the acquisition price.)
“We were able to acquire them at what we think is really a more than reasonable price,” Du Bey told Commercial Observer.
A spokesman for WeWork also declined to comment on the sale price.
“The successful divestiture of Managed by Q is the latest example of how WeWork continues to focus on our core workspace business,” a spokesman for WeWork said in a statement. “We are grateful for the contributions of the entire team at Managed by Q and believe the company is well-positioned to succeed as part of Eden.”
Eden was founded in 2015 as an on-demand tech repair service but eventually pivoted to running an office management platform, raising a total of $69 million. The company currently has offices in San Francisco; Austin, Texas; and has a 10-person team in New York City, Du Bey said.
The acquisition will help Eden boost its headcount and presence in the New York City market, bring over customers like Casper onto its platform and allow the company to integrate Managed by Q’s technology, Du Bey added.
“We’re just really pleased we get to consolidate our category,” Du Bey said. “It’s going to make us better as a combined company.”
The acquisition comes less than a year after WeWork dropped $220 million for Managed by Q, and amid reports of Managed by Q co-founder Teran trying to buy back the company.
Teran was in talks to buy back Managed by Q from WeWork with a team of investors for less than $55 million in December 2019, but the deal fell through after Eden offered to pay a higher price for the company, according to Bloomberg.
Du Bey didn’t want to comment on Teran’s attempt to buy back the company but said Eden had to beat out several other bids for Managed by Q.
Teran is not expected to remain at Managed by Q, according to Du Bey, and his LinkedIn page shows he left WeWork in October 2019. Teran could not immediately be reached for comment.
WeWork bought Managed by Q — which built a single platform that companies can use to hire vendors like cleaning crew, office managers and IT support — in April 2019 as part of a slew of acquisitions the coworking company made in an effort to move past the shared-office business it started with, as CO previously reported.
However, after WeWork’s failed initial public offering and the ouster of CEO Adam Neumann, WeWork has started to shed some its acquisitions as part of majority backer SoftBank (SFTBY) Group’s attempt to flip the switch on WeWork’s money burning model.
Since November 2019, WeWork sold marketing software startup Conductor, workplace analytics company Teem and its investment in women-focused coworking space The Wing, Bloomberg reported.
Aside from selling Managed by Q this week, WeWork also announced it named former oil executive Kimberly Ross as its new chief financial officer, another change in the company’s leadership as new CEO Sandeep Mathrani attempts to turn the struggling company around.
Update: This story has been updated to reflect The Real Deal reported the sale price was $25 million.