London’s Huckletree has closed a £2.4m Series A round to fund the expansion of its coworking community.
Already providing coworking space to 200 people in Clerkenwell, Huckletree is set to offer 500 spots at its second location, which is opening at the ‘cycle-in’ Alphabeta Building in Finsbury Square in early 2016.
The company hasn’t revealed all of its investors, but they do include Force Over Mass Capital, two family offices and one smaller VC firm.
Felix Capital haven’t put cash into the business but have partnered with Huckletree to host events and house some portfolio companies at the new site.
Yonder & Beyond and Faber Ventures will join as founding members, with their investment teams and portfolio companies working out of the Alphabeta Building
Huckletree says it has also heavily invested in creating a digital space for its community of entrepreneurs, where members can crowdsource advice, organise events and use “curated wellbeing services”.
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More spaces are scheduled for London over the course of next year, with Dublin, Paris and Berlin on the cards too.
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How competitive is the coworking space… space?
Macroeconomic factors over the past few years have reshaped the workforce. But coworking spaces are not just shared offices; they are more than just tables and chairs, they are melting pots of activity for creative people.
The market is certainly competitive, but this is a simple response to the high levels of demand we’re seeing for inspiring and collaborative workspaces. The great thing about the sector is that, in general, coworking communities all over London have a common goal: to bring people together. Price wars are for supermarket chains, not coworking communities.
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How do you create a unique offer?
We don’t always get things right first time – we are a startup ourselves – but we listen to feedback and try to make sure our member experience is seamless and memorable. One thing we were missing at our first space was cycling facilities. In our new space near Shoreditch, we will have an iconic, 40-metre bike ramp where members will have direct access to our basement bike stacking system and locker rooms. Problem solved.
We focus on providing the very best basic services before being able to deliver the true value of coworking; we put member connections at the top of our priority list and aim to facilitate those interactions by hosting events, pitch days, workshops and interesting conversations. No amount of free beer will make up for boring design, cramped desks and ridiculous prices.
Is London’s high price of property fueling demand for coworking?
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Price is certainly one of the main factors when weighing up the merits of taking a traditional office space over coworking. Initially, demand for coworking was born out of the global economic downturn of 2007 to 2008, where motivation was very much financial. However, now early-stage businesses and freelancers are drawn in for many other reasons.
Founders can see the tangible benefits of being housed in an inspirational space surrounded by innovative and interesting people. We have witnessed these benefits first-hand. People who work from coworking spaces are more productive, confident and creative, and we see coworking as the next phase of the evolution of the office market.
How easy is it to get funding for ventures like this?
Raising venture capital is never an easy task. Whether it’s an idea for an app or an office block, investors want to see confidence and drive from the founders of a business. Over the first year of operations, we focused on building our community and really getting a feel for what our members were looking for from a workspace. This member and market knowledge was vital.
It’s not easy to raise money, but it’s a whole lot easier when you can show demand for your product or service, a proven revenue stream and several top-quality partners who will help you bring the business to the next phase.