Fresh off raising a $3.8 million Series B round, PivotDesk is expanding its footprint dramatically, announcing today it is launching its service in 23 new markets. The move nearly quintuples the startup’s number of markets and puts it in hubs such as Chicago, Seattle, and Austin, TX.
PivotDesk is a Boulder CO-based startup that has built an online service that helps startups in need of office space find a home and also connects startups with extra space with “guests” to occupy it and help pay rent. Guests pay a monthly fee based on the number of people they have using the host’s office. PivotDesk also has features that manage payment processing and creating the equivalent of a lease.
The company was founded in 2012 and is a Techstars graduate. Foundry Group, David Cohen’s Bullet Time Ventures, Draper Associates, and the Iron Yard are investors. With the recent round, PivotDesk has raised $7.3 million.
PivotDesk will be in 29 cities after the expansion. Among the new cities are Detroit, San Diego, and Houston.
PivotDesk’s value proposition is that it helps startups deal with a mismatch between their unpredictable growth and need for space and the commercial real estate industry’s reliance on long-term leases, co-founder and CEO David Mandell said. Very early stage startups can use PivotDesk to find space without being locked into a lease. Startups that have signed leases for large offices can use PivotDesk to fill their vacant space until they grow into it or fill empty desks if they have to contract.
After taking some time to establish roots in its home markets of Boulder and Denver, PivotDesk has been growing rapidly. It expanded into New York City and San Francisco in the spring of 2013 and added Boston and Portland to its mix last fall.
With the growth of startup communities around the country, the company thought it was the right time to make its big move.
“We have not only two years’ experience, there’s a lot of demand from markets around the country, along with people starting to know our brand, which makes it go a little smoother,” Mandell said. “So we said this is the right time to do it.”
PivotDesk was able to gauge which cities were ripe for expansion through a promotion it ran last year on its website that asked entrepreneurs to tell the company about their cities and why PivotDesk should open up shop there.
“That actually gave us a whole lot of data about demand and to know where people wanted us to go the most,” Mandell said.
But expanding the company’s footprint hasn’t been easy, Mandell said. PivotDesk faced the growing pains all startups face, but it also had to deal with the challenges that come from trying to find a niche in the commercial real estate industry. Mandell likened it to “hand-to-hand combat.”
“We were in essence creating a whole new marketplace
