Coworking Company Switchyards Raises $5M, Plans 200-Location Expansion
Atlanta-based coworking company Switchyards is gearing up for a nationwide expansion, planning to open hundreds of coworking locations following its $5M capital raise, according to Axios.
Founded in 2019, Switchyards operates 15 "work clubs" around the Southeast. It describes its coworking concept as "neighborhood-focused," with locations in residential areas to offer a shorter commute and 24/7 access.
Its latest series D round was led by Bullpen Capital and raised $5M. Other investors include Overline and existing investor Cercano. To date, the company has raised $10.5M across rounds, its previous efforts closing last year and in 2020.
With the funding, Switchyards is bringing 10 locations to suburban Atlanta, Nashville, Charlotte and other cities in the Southeast, according to Rough Draft Atlanta. It hopes to open locations "in every residential neighborhood across the country," and grow to 200 clubs nationwide by 2029.
Switchyards' revenue has doubled every year since 2021, CEO and founder Michael Tavani told Axios.
The popularity of remote and hybrid work continues to climb, with 46% of companies in a KPMG survey embracing the latter in the past year. In tandem, so does the demand for workspaces away from home and the office with a short commute and productive atmosphere.
Enter: Coworking. Just over 6,250 coworking spaces were open in the U.S. at the end of 2023, and that rose 6% to just shy of 6,600 by the end of the first quarter, Coworking Cafe reports.
While the coworking sector is thriving, the larger office sector is in turmoil, with an unprecedented 1.2B SF available in the U.S. as of April 8.
Adding to the available space is coworking's embattled mascot, WeWork, exiting and restructuring leases as it navigates bankruptcy. The struggling operator is facing steep membership losses in the process, going from $89M in membership revenue to $83M from January to February 2024.
WeWork's fed-up tenants are looking for other options, leaving rivals like Switchyards, Industrious, HQ and Regus to swoop in and gain steam. Each of those brands opened more locations in Q1, Coworking Cafe reports, with Regus boosting its space by 17%.
