A group of technology venture capital firms have invested in a startup called Switchyards that is redefining coworking as a real estate venture rather than a tech-based one, despite WeWork’s financial troubles tarnishing the coworking industry. Bullpen Capital and lead investors have led a $5 million funding round in Switchyards, along with existing investor Cercano Management and Overline. Switchyards plans to expand to over 100 locations in the U.S. South over the next five years, aiming to capture the untapped market of remote workers looking for alternative workspaces.
Switchyards has raised a total of $10.5 million to cater to the increasing demand for flexible workspaces globally. The company aims to provide a unique coworking concept that differs from WeWork and is more accessible to remote workers. Similarly, Radious, a Portland-based startup, offers a marketplace connecting homeowners with remote workers, expanding its presence from Portland to cities like Milwaukee and San Francisco. Jarvo, based in London, has also entered the U.S. coworking market with a pilot project in New York City, offering space in residential homes for short-term use.
The shift towards a hybrid work model, where employees split their time between working remotely and in the office, has become more prevalent. Companies are embracing this model to meet the changing needs of employees who desire flexibility and work-life balance. While the COVID-19 pandemic accelerated this shift, it was already gaining momentum before the crisis. CEOs are now considering hybrid work as a long-term solution to retain and attract talent, with 46% believing it will be the alternative to full-time office work in the coming years.
The target market for these startups consists of remote workers seeking a change of scenery from home but not wanting to commute to traditional coworking spaces. Neighborhood Concepts are central to the appeal of these startups, offering workspaces in walkable, vibrant neighborhoods for a better work-life balance. By leasing unique, iconic buildings in urban and suburban areas, Switchyards, Radious, and Jarvo are creating a new kind of coworking experience that resonates with remote workers who value flexibility and convenience.
Switchyards positions itself as a neighborhood work club, focusing on creating a community-driven workspace in iconic neighborhoods across cities like Atlanta, Nashville, and Charlotte. Its membership includes amenities like coffee, high-speed wifi, and 24/7 access, tailored to meet the needs of its diverse member base. As the coworking industry continues to evolve, startups like Switchyards are redefining the concept of coworking by emphasizing community, accessibility, and unique workspace locations. Despite lingering concerns from WeWork’s fallout, investors and members are embracing this new wave of coworking alternatives that cater to the changing needs of remote workers in a post-pandemic work environment.