EXCLUSIVE: WeWork And BuiltTech Labs’ PropTech Partnership
The coworking giant and BuiltTech Labs, an ecosystem for built environment technology, launched a nine-week pilot tech incubator program across the Southeast, starting in Atlanta. If that is successful, it could go global, WeWork Southeast General Manager Bobby Condon said in an exclusive interview.
“Given what we do in the design space and our digital and physical offerings, we want to keep our fingers on the pulse of what is happening in the built space,” Condon said.
The incubator will focus largely on disruptive startups in the built environment. BuiltTech will provide initial seed money for the startups to help them develop business plans and products, and in return WeWork will provide memberships and dedicated office space to grow their businesses. BuiltTech Labs founder KP Reddy said WeWork’s platform can provide the still-young PropTech startup sector the structure it needs for long-term success.
“Because the built environment is fragmented, it’s hard to drive innovation from the top down because there is no top. The enterprise in the built environment is at a project level. We have an ability here to adopt technology to streamline that is enticing,” Reddy said.
Tech companies participating in the accelerator receive their initial funding through Shadow Ventures, a $25M fund founded by Reddy that provides seed funding between $500K and $1M. Reddy said the program is geared toward startups that need full support to develop their products and business strategies. Participating companies have the ability to take advantage of BuiltTech’s global mentor network to assist on product development and extra capitalization, and they can brainstorm with other companies in the program, and identify and leverage new talent within the space.
“When you’re a two- to five-person startup that’s just getting started, it’s hard to find experts to bounce ideas off of. That is the challenge. Knowing you’re part of a community and can leverage the talent within it is important,” Reddy said.
When the startups complete the program, BuiltTech will have the right of first refusal to invest further in these companies.
This has dual benefits for WeWork. The program allows the company to cultivate an in-house pipeline of future tenants as other competitors like Regis and Rent 24 are expanding their footprints in the U.S. coworking market. The relationship will also allow WeWork to create its own network of startups and have direct access to their technology. If the program is successful, it can be expanded across WeWork’s global ecosystem of 253 locations in 74 cities and 22 countries, Condon said.
“From WeWork’s perspective, we’ve only scratched the surface with our global platform,” Condon said.
Condon said WeWork is a global company with a local perspective. It identifies thought leaders within its markets and uses its platform to grow the local tech community.
WeWork earmarked 6K SF within its Buckhead, Atlanta, location for the incubator and added a card reader so that startups in the program are the only ones that can utilize the space.
The decision to launch the program in Atlanta was a calculated one. Condon said Atlanta is WeWork’s Southeast headquarters and home to Georgia Tech. Atlanta is also a large real estate market with a long history of innovation in the built environment. Although 70% of BuiltTech’s portfolio is outside Atlanta, it is Reddy’s home base. Given all of these factors, Condon said having Atlanta as the hub for this new incubator made sense.
The program has already attracted national interest. More than 20 startups and innovative companies attended a networking event for the program at WeWork’s space in New York’s Gramercy Park. So far, two months of startups have entered the BuiltTech program, and Reddy said nearly all of the participants learned about the program by word-of-mouth. BuiltTech is bringing a variety of companies into the program ranging from 3D modeling and printing startups, to Internet of Things companies building sensors and controls to operate building mechanical and electrical systems. Other firms participating in the program are more focused on real estate data collection and predictive models, identifying properties to invest, bringing transparency and accuracy to property valuations and comparables, and financial management.
The ultimate goal for startups graduating from the accelerator is to become worthy of further investment. Condon sees the accelerator as an opportunity to raise awareness of WeWork’s enterprise presence, and support the best startups produced by the accelerator after they graduated the program.
“Once a member graduates, we determine they’re worth further investment," Reddy said.
"We’ll look at how to continue providing them space and support wherever they need it,” Condon said.
BuiltTech also plans to add a separate nine-week accelerator to the partnership for corporate startups. The model is similar to an accelerated MBA program and will launch in June.