A trio of technology venture capital firms, including Bullpen Capital and Overline, have invested $5 million in Atlanta-based Switchyards, a startup that specializes in coworking as a real estate endeavor rather than a technology-based one. Switchyards aims to expand its 15 locations across Atlanta, Charlotte, and Nashville to 200 or more locations throughout the U.S. South over the next five years. With existing investor Cercano Management also participating in the latest round, Switchyards has raised a total of $10.5 million under the leadership of founder and CEO Michael Tavani. The company is targeting individuals looking for workspace outside of traditional offices and is among several startups looking to capitalize on the changing landscape brought about by WeWork’s financial troubles.
Radious, a Portland-based startup founded in 2020, offers a marketplace that connects homeowners with remote workers seeking alternative workspaces. With investments from former WeWork CMO Robin Daniels and remote work proponent Nick Bloom, Radious has expanded its operations from Portland to Milwaukee and San Francisco. Another similar concept, London-based Jarvo, has recently entered the U.S. coworking market with a pilot project in New York City. Jarvo’s marketplace includes homes in various neighborhoods that can be used as workspace on short notice, positioning themselves as more of an “Uber” for workspace rentals.
The shift towards hybrid work models has gained traction, with companies like Switchyards, Radious, and Jarvo targeting remote and hybrid workers seeking workspaces away from home distractions without the need to commute to traditional coworking spaces. CEO Daley Ervin of Cercano Management believes that the hybrid work model was already in motion before the pandemic and has now accelerated due to changing consumer preferences. As KPMG’s surveys indicate, the percentage of CEOs expecting a return to full-time office work has decreased over time, with an increasing reliance on hybrid work models being seen as a more viable option. The shift towards hybrid work is also attributed to CEOs’ concerns about the mental well-being of their workforce and preventing burnout.
Switchyards positions itself as a neighborhood work club rather than a traditional coworking space, leasing space in unique, iconic buildings in urban or early suburban neighborhoods. Members pay $100 per month for access to amenities such as high-speed wifi, coffee, and 24/7 access to the workspace. The company aims to expand to cities in Florida, Texas, and eventually smaller cities like Birmingham, Alabama, and Chattanooga, Tennessee. Despite the success of the hybrid work model, potential investors in Switchyards have had to experience the space firsthand to fully understand the concept and the appeal to members who are new to coworking spaces.
Overall, the coworking industry is experiencing a shift towards more localized and community-centric workspaces, with startups like Switchyards, Radious, and Jarvo adapting to the changing demands of remote and hybrid workers. By offering unique, neighborhood-focused workspaces in unconventional locations, these startups are catering to individuals seeking a balance between work and lifestyle. As the hybrid work model gains popularity and companies reassess their office needs, innovative concepts like these are redefining the traditional coworking experience and providing alternative options for modern workers looking for flexibility and convenience.