Second Home, a co-working startup that rivals WeWork, is looking for funding to continue expanding and to cover the unexpected costs of a Hollywood office, according to a report in the Financial Times.
Co-founder Rohan Silva said terms for a fresh round of capital had been met and refuted claims that the company is short on cash. Second Home raised £20m last year, and now seeks more funding as investors in general are distancing themselves from funding co-working companies, especially after the recent troubles with WeWork.
Second Home has offices in London, Lisbon and Hollywood. The company’s CFO recently resigned.
Silva expects the fresh capital to come before November to help fund the new Los Angeles location, as well as to help bankroll continued expansion.
Previously, the company raised money from VC firms like Index Ventures and Atomico, as well as Tencent President Martin Lau, former Goldman Sachs Chief Economist Jim O’Neill and Israeli-Russian billionaire Yuri Milner.
Second Home was started in 2014, and aimed to set itself apart from other co-working outfits with a focus on design and aesthetics. However, the company has struggled with setbacks in location opening schedules and culture complaints from employees.
Second Home tried to distinguish itself from WeWork’s rapid and aggressive expansion, but eventually opted to take a similar approach.
The company finally made it to the United States in September, opening a 90,000-square-foot Los Angeles office that featured distinctive yellow-roofed pods. The campus boasts 6,500 plants and 400 full-size trees. The office went millions over budget, which Silva said was the contractors’ fault.
“We weren’t in charge of building the building,” he said. “Of course, some of those [extra] costs get passed to us. That’s pretty standard for a tenant. But the reason investors are happy to put money in is the occupancy and revenues [from the LA offices] are so far ahead of forecasts.”