Seven months after JLL’s venture capital arm launched a $100 million fund to invest in proptech startups, the firm is betting the explosive growth of coworking won’t ebb anytime soon.
JLL Spark led a $5.2 million Series A funding round for Hubble, a London-based tech platform that matches office users with coworking tenants like WeWork and IWG, the firm announced. Now with $8.4 million total funding (6.4 million pounds) under its belt and access to 5,000 offices, Hubble has staked a goal to become “the Booking.com of flexible office space.”
The investment puts money behind JLL’s official prediction that coworking space will account for some 30 percent of all corporate portfolios by 2030, said Mihir Shah, co-CEO of JLL Spark.
“Companies [like WeWork] that are building coworking spaces are pretty late-stage at this point, so the timing hasn’t been right for us to invest,” Shah said. “So we’re investing early in the tools for an online marketplace that takes advantage of all of these companies that are coming online.”
Now valued at $49 billion, WeWork rebranded to The We Company this month and registered dozens of trademarks suggesting it could extend into industries as diverse as banking, food service and pet care.
A report published by JLL last year suggested coworking companies could set up shop in empty retail spaces, plugging chronic vacancies and opening a new avenue for the booming industry.
JLL Spark did not disclose its share of the $5.2 million funding round, which the London-based Downing Ventures and M7 Real Estate also backed. But the American fund has set an investment window between $400,000 and $2 million per company, Shah said.
Hubble is the 10th startup JLL Spark has backed with seed or Series A investments since its launch in June, and its first investment outside the United States. Prior to launching the fund, JLL Spark wholly acquired Stessa, an asset management tech firm, in 2017.
Traditionally a slow adopter of new technology, the commercial real estate industry is now trying to stay afloat tidal wave of innovations that promise to transform sales and property management. International law firm DLA Piper announced this month that it had formed a new practice devoted to representing real estate technology companies.
Chicago-based JLL announced its $100 million technology push last year after CBRE and Cushman & Wakefield, its two main competitors, spent 2017 expanding their reach over emerging proptech startups.
But JLL Spark jumped in with a flurry of new startup investments in the second half of 2018, with funding rounds for companies including real estate valuation service Skyline, building management platform VergeSense, and the Boston-based HqO, which gives building tenants a “remote control for amenities,” Shah said.
JLL Spark also sunk limited partner investments into Metaprop and Navitas Capital, two real estate venture capital firms based in New York and California, respectively.
Taken together, the firm’s investment strategy comes down to “first finding software that helps [investors] figure out what assets to buy, then how to better manage that asset, and finally how to create a better experience for the people who occupy it,” Shah said.
The investments give JLL’s army of brokers and researchers access to all the technology being developed by the 10 firms, who in return will have access to a “growth team” of JLL employees assigned to help them expand.
The fund may not keep announcing new startup investments at the same torrid pace as last year, but the JLL Spark has “plenty of money left” for any firm it finds worthy, he said.
“We’re in no hurry to invest,” Shah said. “We don’t have any pressure to deploy capital the way traditional VC firms do.”