Boston-based HqO just raised $60 million in venture capital financing. The commercial real estate (CRE) tenant experience start-up is calling this a Series C, and this brings total financing since inception to over $100 million.
Investors in the round include Accomplice, Insight Partners, JLL Spark, Navitas Capital, DivcoWest, Allegion Ventures, The Pagliuca Family Office, PruVen Capital, Cushman & Wakefield (NYSE: CWK), and Suffolk Capital. HqO plans to use the financing to expand its existing footprints in Boston, New York City, London, and Paris, while the company also plans to expand into the Midwest, West Coast, and Canada.
HqO reportedly tripled its revenue in the last year while simultaneously doubling its headcount. The company works with over 60 CRE clients worldwide -- notables include Columbia Property Trust (NYSE: CXP), Vornado Realty Trust (NYSE: VNO), Nuveen Real Estate (MUTF: FARCX), and Endurance Land.
HqO offers a tenant app, analytics suite, and partner marketplace in over 150 million square feet across seven countries. The company's offering aims to give CRE landlords a way to engage with tenants through digital experiences while providing the data landlords need to make informed decisions about their buildings.
HqO has four main products offerings:
- HqOS: an operating system feature that helps aggregate all customer-facing technology tools within a building
- Marketplace: a curated catalog of other proptech tools that CRE landlords could benefit from
- Tenant Experience Platform: a tenant portal that provides 24/7, on-demand access to programming, amenities, and retail
- Digital Grid: an analytics offering that collects tenant, spaces, people, and experiences data all in one place to help landlords make better-enhanced decisions
Corporate Venture Capital
You may notice a few familiar real estate and construction names on the list of investors -- Cushman & Wakefield, Suffolk Construction, and JLL (NYSE: JLL) all participated in this round of funding. This points to the strong role corporate venture capital has in real estate and proptech.
As a reminder, corporate venture capital is the investment of corporate balance sheet money directly into early-stage companies. HqO's CEO Chase Garbarino touched on this in a press release, saying, "We're really happy with the composition of our Series C round being led by existing investors but also bringing together a network of strategic investors setting HqO up for unprecedented growth as the world returns to offices. This round of funding is more than just capital; it comes with strategic partnerships that will significantly expand HqO's reach and differentiate our offering."
That's exactly the point of corporate venture capital -- for an investor to be able to provide deep industry knowledge that can help the company grow beyond just writing a check.
The Millionacres bottom line
HqO's growth points to the fact that tenants are demanding more than just office space to work. As a CRE landlord, are you prepared for this? And for office real estate investment trust (REIT) investors, tenant experience strategy should be something you consider as you look at your portfolio and future investment opportunities.