In this Behind The News episode of the “This Week in Coworking” podcast, host Hector Kolonas was joined by Jason Anderson to discuss the dynamic world of coworking spaces and the private equity acquisition of Vast Coworking Group from the United Franchise Group.
The conversation unveils the strategic moves, the historical evolution of coworking, and the pivotal role private equity is playing in shaping the future of these spaces.
The History and Evolution of Coworking
Jason Anderson starts by tracing his version of the history of coworking from its inception to the present.
He categorizes the journey into distinct phases:
- Coworking 1.0: Dominated by Regus, this phase was characterized by executive suites where people initially doubted the legitimacy of such spaces. It laid the groundwork for modern coworking.
- Coworking 2.0: This era was spearheaded by WeWork, which revolutionized coworking by making it trendy and desirable for startups and enterprises alike. This phase highlighted community and connectivity within coworking spaces.
- Coworking 3.0: Triggered by the pandemic, this phase marked the largest work-from-home experiment globally. Companies discovered the benefits of flexibility, recognizing that not all employees need to be in a traditional office setting.
- Coworking 4.0: The current phase, starting around mid-2023, sees a shift towards “flex-first” models, appealing to enterprises looking for flexible workspace solutions, akin to the transition from taxis to Uber.
Vast Coworking’s Strategic Move with Private Equity
In their pursuit to become a significant player in the coworking industry, Vast Coworking Group has aligned with New State Capital Partners, allowing them to thrive independently from United Franchise Group. Anderson emphasizes the need for increased resources to compete with multi-billion dollar entities like Regus, Industrious, and WeWork – now owned by Yardi. Notably, Vast’s success is marked by their strategic acquisitions and the seamless transition into a standalone entity.
The Role of Private Equity
The infusion of private equity into the coworking space is not just about capital but also access to valuable resources and networks. Vast is poised to further consolidate its market position by bolstering its branding, marketing, and human capital. Anderson highlights that, while they remain profitable, having access to these resources enhances their growth trajectory.
Expansion Plans and Franchise Model
Vast’s growth strategy hinges on leveraging its franchise model to expand and acquire other brands, both domestically and internationally. They aim to provide a diverse range of coworking solutions, from traditional leases to hybrid and managed service agreements, thus offering landlords varied options.
Vast’s approach mirrors that of Marriott, with multiple brands under a single umbrella offering a range of services and quality levels. Anderson assures that while Vast currently operates as a franchise, strategic partnerships and acquisitions remain a critical component of their expansion strategy.
The Future of Coworking
The conversation ends with a mutual agreement on the vast (pun intended) opportunity in the coworking industry, cemented by the demand and supply imbalance. As more companies move towards flexible workspaces, Vast is well-equipped to capture a significant share of this burgeoning market. With Jason Anderson’s insight, it’s clear that the coworking industry is more than just a trend; it’s an essential evolution in the way we work.
The episode with Jason Anderson offers a detailed exploration of the coworking landscape and outlines Vast Coworking Group’s ambitious plans in this dynamic industry. As coworking continues to grow, Vast’s strategic alignment with private equity positions them as a formidable player ready to lead the charge into the future of workspaces.