Legendary venture capital firm Sequoia is making an investment in Gather, a virtual engagement platform. While Gather offers services for weddings and other events, it's currently focused mainly on its virtual HQ offering. What does Sequoia see in the company, and what does this mean for the real estate industry moving forward?
What is Gather up to?
Phillip Wang, Gather's CEO, started the company with a few friends after separately graduating from MIT and Carnegie Mellon. Gather's goal is to create virtual spaces that feel homey with customized elements. For example, the company has a "shoulder taps" feature to prompt a coworker to chat, while coworkers can also gather for things like a virtual game of pool.
In an article with Techcrunch, Wang said, "We're a much broader communication platform that is going to be used across all things, but we are leaning heavily into the virtual HQ." Think of the virtual HQ as a mix between Zoom (NASDAQ: ZM) and a video game version of an office. When you're within a certain proximity of a person or people, a video chat is launched with that individual or group of people. Wang added that the end goal is to allow folks to move from a virtual office to a "virtual bar" after work for remote teams.
Gather is also using what's referred to as spatial audio technology, a feature that makes it so employees can get the feel of running into one another. This feature also lets you hear people more loudly when they're close, while they're quieter when they're further away.
According to Wang, Gather is generating $400,000 in monthly revenue after launching less than two years ago. That revenue comes from a whopping more than 4 million users. The $26 million investment round will put Gather into high gear.
Start-ups line up to get a check from Sequoia. Not only is it an elite Silicon Valley-based venture capital fund; it also has a tremendous track record of investing in remote work and productivity start-ups. Two that you've probably heard of? Zoom and Slack (NYSE: WORK).
According to Techcrunch, Gather wanted to avoid venture capital funding for as long as possible. Wang was concerned growth incentives might be misaligned and the venture funding would come with unrealistic growth and monetization expectations. With all that in mind, Gather ultimately landed with a great partner.
Shaun Maguire from Sequoia apparently convinced Wang to accept the investment. Maguire explained, "Phillip and [his] team's motivations to create Gather precede the pandemic...They realized that certain constraints in the physical world hinder your ability to stay connected with people outside of your immediate community -- this was merely intensified during the pandemic." Maguire and Sequoia are clearly expecting the need for virtual workspaces to continue after the pandemic ends.
The Millionacres bottom line
Sequoia has a track record of getting these types of deals right. With remote work trends expected to continue, there are a couple of key things the real estate industry will be keeping an eye on. Multifamily owners and operators will need to continue to provide amenities to facilitate remote work, while offices will have to adapt to what's happening. Will this investment ultimately impact these both, as well as other real estate investors?