Industrious raises $37 million to take on WeWork

Month-to-month coworking spaces being used by Hyatt, Instacart, Spotify, Pinterest, and Lyft

Editor's note: Our 6th Annual Vator Splash LA conference is coming up on October 13 at the Loews Hotel in Santa Monica. Speakers include Mark Cuban (one of the hosts of Shark Tank and owner of the Dallas Mavericks); Brian Lee (Founder & CEO, Honest Company); Leura Fine (Founder & CEO, Laurel & Wolf ); Nick Green (Co-Founder and Co-CEO, Thrive Market); Tri Tran (CEO & Co-founder, Munchery); Adam Goldenberg (Founder & CEO, JustFab); Andre Haddad (CEO, Turo); Mike Jones (Founder, Science) and many more. Join us! REGISTER HERE.

Let the transformation of the traditional workspace continue.

Industrious, a platform for booking month-to-month coworking spaces, today announced that it has secured a $37 million Series B round of funding led by Riverwood Capital.

Industrious is a lot like another company you’ve heard of: WeWork. Like WeWork, Industrious is based in New York and has sought to capitalize on changing expectations around work and the workplace. The gig economy has given way to a new wave of freelancers in need of office space, while even traditional employers have been trading in stuffy cubicles for open floorplans. Technology has played a major part in these changes, as more powerful mobile devices have untethered workers from their desks and other traditional ways of working.

Offering month-to-month contracts for its coworking spaces, Industrious says it targets everyone from freelance entrepreneurs to employees of Fortune 100 organizations. Customers today include Hyatt, Instacart, Spotify, Pinterest, Lyft, and Chipotle.

But the future of work isn’t cheap. On Industrious, costs for renting vary depending on the location: in Brooklyn, for example, Industrious offers private offices starting at $700 per month and desk rentals (in a shared coworking space) from $500 per month. Still, the company doesn’t appear to be struggling to find renters, with revenue growing fivefold in the past year.

There is the looming question of how Industrious will compete with WeWork, which has raised over $1.4 billion in venture capital and has not only staked a claim in the U.S. but has already looked both internationally and at different business models for expansion. When asked how Industrious would compete, a spokesperson told me it basically comes down to a nuance in brand:

“While competitors typically offer a casual environment, Industrious is targeted for the professional -- a demographic that needs a space with a higher standard of maturity, sophistication, and professional polish. With its refined aesthetics and design-oriented spaces, Industrious is where businesses go to thrive.”

So perhaps an office space on Industrious features more suits and less kegs?

The same spokesperson said to think of Industrious as “Caviar, not GrubHub,” which is a nod to the company’s focus on building its communities locally.

“At Industrious, we treat our members the way the world’s best hotels and restaurants treat their guests,” said Rachael Gursky, Head of Hospitality at Industrious, in a prepared statement. “Doing this in a thoughtful way results in very satisfied, loyal customers.”

Currently operating in 11 cities across the U.S.—including Los Angeles, Chicago, and Brooklyn—Industrious plans to use its new funding to open up new properties in a dozen other cities, including Seattle, San Francisco, and Manhattan.

The company had previously raised $14 million in capital from unnamed investors. Riverwood, the newest investor in Industrious, counts Spredfast, The Melt, and Ticketfly among its existing portfolio.

Ed. note: Our 6th Annual Vator Splash LA conference is coming up on October 13 at the Loews Hotel in Santa Monica. Speakers include Mark Cuban (one of the hosts of Shark Tank and owner of the Dallas Mavericks); Brian Lee (Founder & CEO, Honest Company); Leura Fine (Founder & CEO, Laurel & Wolf ); Nick Green (Co-Founder and Co-CEO, Thrive Market); Tri Tran (CEO & Co-founder, Munchery); Adam Goldenberg (Founder & CEO, JustFab); Andre Haddad (CEO, Turo); Mike Jones (Founder, Science) and many more. Join us! REGISTER HERE.