LONDON, UK – Greenhaven Road Capital made a significant new investment in IWG, a London-listed company that manages shared workspaces, during the fourth quarter of 2023. IWG operates 19 different brands across 3,400 locations in 120 countries, serving 8 million customers ranging from freelancers to multi-national companies.

Unlike its bankrupt competitor, WeWork, IWG has a more sustainable growth model with leases that can be terminated with minimal breakage costs. This, coupled with the trust earned by IWG’s management, sets it apart from WeWork. With over six times the number of locations as WeWork, IWG has better customer acquisition and revenue retention, and a quarter of its revenue comes from ancillary products and services.

IWG’s partnership model, which shifts capital and operational costs to landlords, is a key driver of its business model transition. The company has added over 462 partner locations in 2022 and is projected to exceed 1,000 new contracts in 2024. IWG’s Worka division, the largest flex workspace marketplace, has connected businesses and employees to over 40,000 flex spaces in 170 countries and 5,500 cities, generating $450 million in revenue in 2023.

As IWG’s partnership locations continue to ramp up, the company’s financial statements are expected to reflect the economic benefits of this scaling business. The division contributes to IWG’s overarching goal of adding 1,000 new locations per year, substantially growing the company’s annual contribution. The transition is forecasted to bring IWG’s EBITDA to $1 billion in the medium term.

Looking at the company’s financials, IWG’s market capitalization is just under $2 billion with net debt of $750 million. Its revenue is primarily derived from company-owned locations, with Worka being the second-largest contributor and the partnership business as the newest and fastest-growing arm. Despite the challenges facing the office real estate market, Greenhaven Road Capital believes in the long-term potential of IWG’s business model transition and assets.

Greenhaven Road Capital’s investment in IWG reflects optimism about the company’s future direction as it expands its partnership model and continues to grow its diverse portfolio of flexible workspace solutions.