Although WeWork’s recent roadblocks and failed attempt to go public has put a slight damper on the flexible workspace industry, its biggest competitor is still optimistic.
IWG, the world’s largest operator of coworking spaces, is moving forward with its franchising business model, with the potential to go public with its North American business.
“We are looking at strategic opportunities, like a possible split in moving the U.S. business onshore,” said Mark Dixon, IWG’s CEO. “We’re always looking for new options for what we can see is a very strong appetite for the industry in the United States.”
Despite WeWork and IWG sharing a similar core business model, IWG has been around since 1989, manages to make a profit, has risen back up after filing for bankruptcy, and was still valued less than WeWork in public markets to the confusion of many analysts.
More recently, IWG’s growth strategy involves franchising its businesses to third parties who take on the risks of the lease, but operate under IWG’s various brands. This year, the firm sold nearly all of its Japaneses operations to Tokyo-based company TKP Corporation for $393 million. This led to the company’s shares on the London Stock Exchange to grow by 20%.
IWG hopes to continue expanding this model across the U.S. by partnering with franchisee owners who work with companies such as Starbucks, Holiday Inn and McDonalds in mid-sized cities and small towns.