1776 and Benjamin’s Desk made their merger official on Monday.
The deal will see the combined company named 1776, and day-to-day management of the D.C. incubator network handled by leaders of the Philadelphia-based coworking company.
According to the companies, Benjamin’s Desk co-CEOs Anthony Maher and Jennifer Maher will continue to carry those titles. 1776 CEO Evan Burfield will now be executive chairman of the company.
The two companies initially partnered on a joint venture in Philly and the 1776 Challenge Cup in that city, which held its finals last week. A release from the companies sought to position the merger as a move to consolidate mid-Atlantic spaces under one brand. The combined company will have a presence in D.C., Wilmington, Del., Philly and NY. It now counts 1,000 members, and more than 200,000 sq. ft. of office space.
— Union (@JoinUnion) October 16, 2017
“We’ve spent five years watching member companies bring new jobs to Philadelphia, and we’re so excited about the potential to see members inventing new futures for communities up and down the Northeast Corridor,” Maher said in a a statement.
Financial terms were not disclosed. Sources described the deal to the Washington Post as a “complicated stock merger in which shareholders of both companies now hold significant ownership interests in the combined company.”
Maher told our sister site Technical.ly Philly that no layoffs are expected with the merger.
In a post on the DC Tech Facebook page Monday morning, Burfield acknowledged “speculation in recent weeks around a potential deal,” and said the talk “coincidentally sped up the preliminary conversations we had started with our long-time partner.”
The incubator was founded in 2013, with the mission of providing support to startups. The 15th St. campus became a central hub for the District’s tech community, housing companies, hosting events and providing access to a network of mentors. A second location in Crystal City followed. A seed fund, which will remain as a separate legal entity, was also established in 2015. Expansion outside D.C. came with the Challenge Cup, a global startup competition. Last year, 1776 opened locations in Brooklyn and Dubai. This year, the incubator trained its focus on 12-week programs that make startups “investor ready,” and are undergirded by partnerships with larger companies. Throughout, the Post quotes sources saying 1776 “struggled to stay cash-flow positive after its first year.”
As part of the deal, Burfield will also become CEO of a spinout company which will develop 1776’s Union platform. The platform will continue to be available to companies in the network. The Post reports former Politico executive Peter Cherukuri, who was hired last year as CIO, is leaving the company. There have also been high-level staff departures over the last year, including former co-CEO and cofounder Donna Harris, former Managing Director of Education Ventures Rusty Greiff (who remained a partner in 1776’s seed fund), former Managing Director David Zipper (he also remained a seed fund partner) and former 1776NY Managing Director Rachel Haot.-30-