Coworking space Rainmaking Loft is shutting down its London branch due to fierce competition from US rival WeWork, which is aggressively expanding after being backed with billions of dollars.
The startup space provider announced its shutdown in a blog post last week, saying: “There are literally hundreds of great co-working spaces in London, and many of them with many millions or even billions in investor funding.”
WeWork, valued at over $US20 billion (£15 billion), recently opened a space in the same building as Rainmaking Loft at the luxurious St Katherine’s Dock, which sits next to the Tower of London.
“They [WeWork] took a space 5 times larger than ours, and they spent 9m GBP buying furniture,” wrote Rainmaking Loft London managing director Avril Mulcahy in the blog post. “Well done! However, their emergence in our building did make a question that had been luring in the corners for a while very obvious: is what we are doing still meaningful?”
Rainmaking Loft London has been operational since June 2013. It charges its 250 members £379 per desk per month.
A Rainmaking Loft member who wishes to remain anonymous told Business Insider: “I think a lot of people will move upstairs to the new WeWork but we’ll probably find somewhere more central — Soho maybe where a lot of our clients are based.”
They added: “To be honest we’re not too bothered because we were half thinking about moving anyway. We’ve been here since our company’s beginning over two years ago and it’s time to move on. But this puts a deadline on it (doors close 31st December 2017) and there will be a mass exodus with all the other companies, which could make things more difficult.
“Also this is one of the most beautiful spots in London and other coworking spots have a lot to live up to. It’s a shame because the place has been good to us and helped us grow as a company. It’s always been designed a stepping stone to bigger things and I’m really happy to have been a part of that culture.”
Rainmaking Loft also has a space in Berlin and Copenhagen. It’s unclear whether they will be affected.
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