Toronto’s OneEleven launches space in London, but will its scale-up services fly?
Last time I checked London was awash with co-working spaces, shared office spaces, spaces of every shape, size and color. If there’s one sector that always makes money during a boom, it’s the sector that makes the spades and pick-axes for the gold-rush. And that’s exactly what’s happened to London’s tech scene: a property boom.
In the last year at least we’ve seen WeWork expand to 31 locations in London alone. Meanwhile, it’s well-funded native US challenger from New York, Knotel (which has a polar opposite approach to WeWork in the way it brands its spaces) is expanding rapidly across the city.
Now the Canadian are coming!
Toronto’s OneEleven thinks it has a new take on helping London’s fast-growth businesses with space. They call it “scale as a service”. Yes, this also sounds like marketing hype to me, but, the company insists, there’s more to it than that.
What this boils down to is giving its tenants access to turn-key services such as HR, brand and marketing support, sales tools and the like. The idea being that founders and their teams get freed-up to focus on their business. That’s aside from the usual selection of office spaces and meeting rooms etc etc.
In its native Toronto, OneEleven claims to have seen 70 member companies raise more than $500 million at a collective valuation of more than $2 billion since 2013 by applying this methodology to its customer base.
Dean Hopkins, CEO of OneEleven, says the company is addressing a real need: “London offers incredible support for early-stage businesses as they start out, and once they reach Series A funding – but there simply isn’t enough of an infrastructure out there at the moment to help companies at that crucial in-between stage. Many companies will go through accelerator or incubator programmes that provide them a valuable kickstart, but when the fixed term is up they are too often left to fend for themselves with little support in maintaining that momentum.”
He’s engaged UK managing director Rob McPherson who wants to “create a truly bespoke version of the OneEleven experience that is best suited to the London ecosystem.”
So far so good.
But wait a second, do the startups pay for these services?
A spokesperson told me that the services are provided “a-la-carte as individual subscriptions – our members can buy only what they need for only as long as they need.” So in other words, although OneEleven doesn’t take equity in its members’ companies, these extra services don’t come free for businesses in the building.
That’s not the approach of other competitors in the London ‘tech spaces’ space.
Natasha Guerra of Runway East tells me: “Runway East provides free investment support for its startups, running monthly VC office hours as well as updating leading London VC’s on a monthly basis with details on which members are raising… We provide this service for free as part of our commitment to supporting our members.”
Meanwhile, over at TechHub, CEO and co-founder Elizabeth Varley says: “At TechHub our entire support programme is included in the membership price and we run at least one VC event a week for our members. No fee, no percentage, no equity.”
So this approach of offering paid-for support services to companies which sign up to office space is clearly a fairly new one for London’s tech scene. The question is will it fly? With Brexit storm clouds on the horizon, it’s frankly impossible to predict anything these days.