Eden beat out Managed by Q’s former founder in a bidding war over the WeWork-owned startup.
Be careful who you sell your company to.
That timeless lesson is in full view today: WeWork has sold Managed by Q, the New York City-based on-demand office services startup. Here’s the twisted story of the battle over it.
In April 2019, WeWork agreed to acquire Managed by Q for $220 tomillion. According to the terms of the deal, Managed by Q CEO Dan Teran would stay on after the acquisition, and the company, along with its 500 employees, would remain a wholly-owned separate entity from its parent.
But then WeWork’s plans for a flashy initial public offering imploded, and it had no choice but to put the office services firm on the chopping block as part of its cost-cutting measures. As the situation got more serious, Teran was determined to try to control his company’s fate. He began raising money to buy back his company at a fraction of the price for which it was acquired.
But there was an outside bidder lurking: Eden, a San Francisco-based startup and one of Managed by Q’s biggest competitors, was also interested in buying Teran’s company.
About three months later, Eden has won the bitter battle for Managed by Q. Teran was unable to win back ownership of his firm. According to TechCrunch, the purchase price was $25 million, a tiny slice of what WeWork paid for the company less than a year ago. (Eden declined to confirm or correct the amount with TechCrunch.)
Eden also announced a $29 million funding round led by JLL Technologies, which was used to fund the acquisition.
It’s a blow to Teran, but the story serves as a reminder that once you sell your company, its fate is fully in the hands of its new owner. Some version of the WeWork fiasco might happen more often than we realize.
Polina Marinova
Twitter: @polina_marinova
Email: polina.marinova@fortune.com
