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WeWork is in talks to acquire start-up SpaceIQ as it pushes into software ahead of IPO

Key Points
  • WeWork is in talks to acquire software software SpaceIQ, according to people familiar with the matter.
  • SpaceIQ, which sells software to help companies efficiently use office space, has raised $11.5 million in three rounds of funding.
  • WeWork may be looking to position itself as a technology company and not just a commercial real estate company as it prepares to talk to Wall Street.
CEO of WeWork Adam Neumann
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WeWork, the owner of co-working spaces across the globe, is in talks to acquire real estate-focused software start-up SpaceIQ, according to people familiar with the matter.

A deal for SpaceIQ, a Silicon Valley-based developer of management and analytics software for making efficient use of office space, could help WeWork convince Wall Street that it's at least somewhat of a technology company as it gears up for an IPO. WeWork said in April that it had confidentially filed for a public offering, and the Wall Street Journal reported this month that the debut is planned for September.

The sources, who asked not to be named because the talks are private, did not provide potential terms of the deal. SpaceIQ has raised about $11.5 million in venture funding.

A WeWork spokesperson declined to comment. A SpaceIQ spokesperson said in an email, responding to a request for comment, that "media inquiries are being funneled through WeWork's Corporate Communications Team."

WeWork, which rebranded itself as the We Company earlier this year to reflect its expansion beyond the co-working market, was last valued around $36 billion after Japanese technology and telecommunications giant SoftBank invested about $2 billion in the company in January. WeWork lost $264 million in the first quarter while revenue more than doubled to $728.3 million.

Justifying its latest valuation — or a premium to it — on the public markets is becoming more difficult as investors take a skeptical view of cash-burning companies that raised billions in private capital to fuel growth. Uber is trading below its $45 IPO price from May, and smaller ride-hailing rival Lyft remains under its debut price of $72 from March.

WeWork has made a number of acquisitions in recent years, including a deal in April for Managed by Q, a software platform for hiring services for offices. WeWork reportedly spent $200 million to acquire Meetup, a service that helps people organize meetings.

— CNBC's Deirdre Bosa and Sara Eisen contributed to this report.

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