WeWork is a real estate business that acts like a technology company. It's backed by powerful Silicon Valley venture capitalists, hires data scientists and DevOps engineers and sports a valuation that's about 20 times annual revenue.
John Arenas is taking a very different approach with his co-working business Serendipity Labs. Founded in 2011, a year after the launch of WeWork, Serendipity is sticking with investors who live, sleep and breathe real estate.
Serendipity, based in Rye, New York — 30 miles north of WeWork's Manhattan headquarters — has just raised $11.3 million from investors, including billionaire Craig Hall, one of the top real estate developers in Dallas. The company disclosed the financing in a filing on Monday.
"All of our investment to date has been from strategic capital and not venture capital," Arenas said in an interview with CNBC. The business is focused on the "shift from long-term conventional leases to flexible, variable real estate. To do that you need to find your way a bit," he said.
Arenas has been in the market for decades. He was an executive at Regus from 2001 to 2004, joining through the sale of Stratis Business Centers, where he had been CEO for five years. In 2005, he started on-demand workplace start-up Worktopia and sold it in 2011.
His company is currently running far behind WeWork in terms of size. WeWork has 203 locations in 50 cities, while Serendipity has six locations. But WeWork's $20 billion valuation has brought with it multiple stories of missed revenue targets and reeled in profit forecasts.