In early 2020, Christophe Garnier was in a buoyant mood.
The serial entrepreneur and keen surfer had recently created his fourth company, an HR tech start-up, and things were going well. Better than well.
The previous September, he and his co-founder, Ginger Dhaliwal, had secured $1.5m from angel investors for their tech baby. In January they pulled in another $4.1m in seed funding. By March the platform had grown to 2,500 workspaces.
“And then Covid,” he says. “And then we lose all our customers. Every one. Overnight we lose all the demand.” Garnier flashes a rueful grin. He makes a very Gallic hand gesture, his entire business going up in smoke.
That could be the end of the story. Another Covid victim, another promising enterprise struck down before it had a chance to thrive, by events beyond its control.
But that is not this story. Because Garnier doesn’t think like that. Instead, he went out on the waves, cleared his head, and came back with a plan.
The company that Garnier founded was Upflex. And far from being a victim of Covid, it looks set to be one of its beneficiaries.
In the past two years Upflex has evolved from an employee benefit platform, helping businesses find deskspace for team members, into a fully-fledged proptech platform. In May it raised $30m in an oversubscribed series A. WeWork led the raise, not only putting in $5m, but signing a deal that hands Upflex the exclusive right to list and book its spaces. Other strategic investors included Newmark and Cushman & Wakefield.
Shortly after that, CBRE’s Isobel McKenna joined Upflex to lead its London-headquartered EMEA arm – “She is brilliant,” Garnier enthuses.
Now Upflex has more than 6,000 workspaces, in over 700 locations across 80 countries. “EMEA is a huge focus for us,” says Garnier. “And the UK is the biggest market for flex in the world. Hands down.”
In Europe it has access to more than 1,900 locations, while in the UK Upflex’s network extends to over 500 locations, totalling more than 400,000 sq ft of flexible, on-demand office space. Just last week it signed a deal with Landmark, adding its 44 UK locations.
Not bad for a business that almost slipped beneath the waves.
Head above water
Garnier started his first company – a mobile marketing agency – 20 years ago, following that with an e-commerce platform aimed at helping cash-strapped families buy branded goods for their kids.
“That was very painful,” recalls Garnier. “A lot of investors raised a lot of money and then it grew very fast. And then the investors were misaligned with the founders and it became a nightmare.”
Garnier got out, and started to look for something new. “I wanted to do something different, I wanted to be around people.”
The third business, founded in 2013, was Spark Labs, Garnier’s first step into the flex space. It was, and in fact still is, a successful co-working space, on Manhattan’s Union Square. Its original USP was to help European entrepreneurs get a start in the US, giving them access to workspace and finance.
Garnier, who left France in 1989 before spending time in San Francisco, Silicon Valley and New York, was effectively helping out his younger self. And it was a hit.
“So, I quickly open Spark Labs 2,” he recalls. That was in Bryant Park, next to Grand Central Station. “And after four years, we tried to open more and we realised that we were too late.”
The coworking market that Garnier had identified as an opportunity in 2013 was now, by 2017, hopelessly crowded. “There was WeWork, there was Knotel, there was Industrious – and suddenly it’s impossible to raise money.”
Again, this is a point where the story could have ended, where a different sort of person would have moved on. Not Garnier. Again, he went down to the ocean, collected his thoughts.
Now living in San Diego, Garnier, who was born on the French coast, tries to surf every day.
“There is something about the ocean. I’ve always loved it. I was born next to it. It’s my passion. And it’s the only thing that gives me peace.
“I surf so that I can be, I don’t know, a better person. When you’re caught up with business and stress, it’s easy to lose track of the human values that are very important, that should be overarching everything you do.”
Back in 2017 it allowed him to focus on the next thing. “And obviously the next thing is, you know, no lease.”
As WeWork would discover in 2019, all those office leases can become a hefty burden. “We were asking: how do we create something that doesn’t have liabilities?”
Garnier and Dhaliwal had long been fans of Gympass. “It is the company we’ve looked up to since the very beginning, one of the big inspirations,” he says.
Instead of owning scores of gyms and appealing to individual consumers, Gympass offers businesses access to a network of more than 2,000 gyms. The businesses then offer that to their workers.
“Because it’s B2B, because it’s an employee benefit, an employee experience, we love that. Ginger loves that especially. I love the model and she loves the employee experience aspect.”
The thinking was simple. Why not do that for co-working?
“And so that’s how we get started with the UpFlex. That’s how we are different from the get-go.”
Supply and demand
The idea was effectively HR tech, offering the platform as an employee benefit.
But the near-death experience of Covid helped Upflex to morph into something else. Fortunately, the firm had closed $2.5m six months before Covid. “We hadn’t had the time to spend anything. We had money. That’s how we survived. We were so lucky.”
And because the demand had gone, Garnier focused on the supply.
Garnier was reading the news one day and saw that Accor hotels in Europe had launched a health and safety stamp. In a nutshell, wherever you saw the stamp, you knew it was safe to stay.
“And I’m like, wow, that’s really, really cool.”
Garnier and Dhaliwal came up with Safe Spaces TM – essentially the same thing, but for workspaces. “And we start pitching that to the suppliers. We said: You guys have a problem, no one wants to go to your offices and your spaces. Everybody’s leaving. Everybody’s freaking out. But if you take that stamp – Safe Spaces – you are telling the world you’re doing something about Covid. You are telling the world that you are resilient and that you are here to welcome them in a safe manner.”
At a point when Upflex could have dwindled to nothing, the innovation instead boosted the network from 2,500 spaces to 5,500 spaces in less than a year.
“We said: ‘This is a global alliance of the co-working guys, who are coming together to provide a home for anybody who needs to work in a safe manner under safe spaces’. Oh, and by the way, Safe Spaces is only available on Upflex.” He laughs. “We became the biggest network of workspaces, even bigger than Regis. And during Covid!”
In late 2020, Upflex bagged Schneider Electric as a customer. “Our first multi-million dollar contract. And then we get another one and another one.”
With that, the momentum built. Colliers approached them about a white label version, which became colliersmobilitypass.com. “That’s how we were transformed from an HR tech business through the pandemic into a proptech company.”
White label versions for JLL, Newmark and Cushman followed, along with strategic partnerships and investment.
“Half of the excitement is: ‘Great. We got that deal with these guys.’ That’s awesome. But the other half of the excitement is how much we are learning through them, because they know so much more than we do.”
And those early competitors, who effectively drove Garnier out of the co-working business, have now become his partners and his backers. Spark Labs is on the books, and WeWork is his major investor. Because the funds were not the only objective.
“The goal was really to get expertise and credibility on the commercial real estate market,” he states. “The goal was not to get WeWork’s money, but to lock down WeWork from working with anybody else. The goal was to lock down some of the largest brokers, because they hold the relationship with the largest employers around the world.
“That is a huge headstart for us, and a huge advantage when we speak to customers.”
Having said that, the funds are impressive – $30m is no small change for a series A. And one of its backers is Industry Ventures, a $4bn fund. “If we need more, we can go back to that.”
Hitting restart
Upflex now has the cash to grow – “aggressively,” Garnier adds. “We will grow our revenue, the size of the network, extend features and make the technology the standard that we feel is required.”
Flex space is one of the big winners from the changes wrought by the pandemic. Before the lockdowns it accounted for perhaps 3% of prime global office space. In the next two years it is projected to account for 25%.
According to JLL, the EMEA flex market is likely to see accelerated growth, with more than 40% of occupiers expecting to increase their use of flexible workspace. In the UK, the volume of flexible office space is predicted to double by 2023 compared with 2019, according to figures from Statista.
“What we are seeing now is a kind of a restart,” says Garnier. “So what we are thinking of at Upflex is, what is the office looking like in 2030, 2040? How do we build the infrastructure that’s going to create value and be something sustainable for everybody to use?”
And as the network evolves, those strategic partnerships will play a greater role. So far Garnier has not leveraged the brokerage firms to get any of the serviced offices on the network. But Upflex is becoming less a coworking aggregator and more of a flex office aggregator and platform. “The contingent of coworking is going to go from 98% to 70% to 50% to 30%.”
Indeed, Garnier sees coworking as a way to prove the model. “Now we’ve proven that. We have some of the largest employers around the world giving our app to their employees. Now we’re talking to hotels. Now we’re talking to landlords. And yes, the brokerage firms are going to be able to help us, not only on the demand side. They’re going to start helping us on the supply side.”
They will help to bring in the landlords. “There are tons of landlords who are increasingly converting space to flex,” Garnier notes. “They say, I’m going to convert five, 10, 20% of my buildings to flex in order to respond to that demand.” Companies like Tishman Speyer and RXR in the US. Or GPE in the UK.
Doubling down
Garnier’s goal is to reach close to 10,000 locations this year. Next year the target is 20,000. He also wants to add more territories, starting with EMEA, but launching partnerships in Asia too.
Over the next 18 months he is going to double down on technology. “We have a very long list of technology developments. It doesn’t stop.”
By connecting all the players – the tenants, employers, the workspace providers and the agents – Garnier says the increase in speed and efficiency is phenomenal. “A flex requirement on average takes, what, 60 days, 90 days? We can do it in three.” He says agents will be able to increase the number of deals they do fivefold, just by leveraging the technology.
“So we need to automate, continue on automating, automating. We’re not there yet, but if we can get there, it’s a multibillion-dollar business. No question about it.”
There is another flash of Garnier’s single-minded drive. It is hard to image him as the care-free surfer. “We have so much to do. So much, so much to do. In order to become the great company we want to be, that we hope we can be. It’s going to take more time and more work and it’s going to require a lot more development.”
When we speak it is early morning in San Diego, but Garnier has been up for hours. “My days are insane. I work between eight to nine hours back-to-back-to-back every day. But I’m having so much fun.”
He has been in meetings – among them a call to McKenna in London – but actually most of the morning has been spent doing the really important things: surfing and looking after his daughter, “my other full time job”.
“I love my work,” he says. “But some things are more important.”
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