WeWork is selling Meetup, the social network that encourages people to get together in person, to AlleyCorp and a team of private investors, the coworking company has confirmed to Fortune.
The sale comes just days after WeWork’s majority owner, SoftBank, announced a $41 billion asset sale to help it weather the downturn in the global economy because of the spread of the coronavirus. Both WeWork and AlleyCorp declined to share the purchase price, but several sources privy to the discussions say it was a fraction of the $156 million that WeWork paid for Meetup in 2017.
“Our decision to divest Meetup aligns with WeWork’s renewed focus on the company’s core workspace business and marks a positive step forward for both WeWork and Meetup,” WeWork’s head of corporate development, Rohit Dave, said in a statement provided to Fortune.
According to AlleyCorp CEO Kevin Ryan, during the past month of the coronavirus pandemic the Meetup brand has become “more important.”
“This is terrible now, but we are going to get in rooms together in the future,” Ryan says. “Also, I have spent lots of quality time with my family the last few weeks, and I am ready to meet other people!”
To wit, as much of the world has stayed inside during the pandemic, Meetup—which was founded in the aftermath of 9/11 as a way for people to connect with their communities—has pivoted to online gatherings, a first in the company’s 18-year history.
“At the end of the day, we wanted someone who was aligned with our mission and deeply cares about human connections,” Meetup CEO David Siegel tells Fortune. “Secondly, [we wanted] someone who could make Meetup stronger from a tech standpoint.”
More than 100,000 niche Meetup topics, ranging from exotic dancing to Javascript tutorials, are now being run online. Siegel said the company had its highest revenue and first profitable month in five years in February, and he believes the business will continue to strengthen as people seek more human connection during a time of crisis.
“Cities are going to open up, and as they open up we will message our organizers and members and say we want you to set a goal for 10,000 Meetups,” Siegel says. “We are going to empower our organizers to get people back out, city by city.”
Siegel says he met with more than 50 prospective buyers before he recommended AlleyCorp, which has launched Internet companies including Business Insider, MongoDB, and DoubleClick, to name a few.
In contrast to WeWork’s growth-at-all-costs mantra, Meetup took a slow and steady approach to expansion, raising $18.3 million over 11 years before it was acquired by the coworking company. WeWork has raised nearly $13 billion since the company got off the ground in 2010. It also took a $9.5 billion bailout from SoftBank last October.
In a letter to investors last week that was obtained by Fortune, WeWork said it “has a strategic plan and a sound financial position.” As of Dec. 31, 2019, the company had $4.4 billion in cash and cash commitments, leaving the company with the “financial resources and liquidity to execute our plan through 2024,” the letter said.
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