The Download: A co-working space for suburban start-ups takes shape in Reston


Chip Paucek is chief executive of 2U, a company that creates online versions of established degree programs. (2U/2U)

Another co-working space for start-up companies and other small organizations seeking a bustling, collaborative work environment has opened its doors — in Reston.

Refraction offers many of the amenities found at similar venues, such as 1776 and WeWork in the District, including desks and conference tables that can be reserved on a daily, monthly or long-term basis. But unlike many of the co-working spaces to crop up in recent years, it will serve a distinctly suburban crowd.

“In the city, you might find 20-somethings with an idea or early-stage concept that will be well served by [the] collaboration and mentoring that 1776, WeWork and other options can provide,” founder James Quigley said.

“The Reston/NoVa entrepreneur tends to be a little older, has more of a track record, and is building a company already past the ideation phase. These are the individuals that will probably find Refraction an ideal home,” he added.

The name Refraction originates from the way light refracts when it passes through a medium. Think, for example, of white light passing through a prism.

Quigley moved his own mobile apps company, Canvas , into the Refraction space in January, along with several tenants who were part of a previous co-working space. The 17,000 square foot office in Reston Town Center will house 20 to 30 organizations with between one and 15 employees when full.

“It’s not currently designed as a moneymaker in the conventional sense, but as a forward-thinking approach to empower participating communities through collaboration,” Quigley said. “We are confident organizations that become a part of Refraction will benefit significantly, as will Canvas employees through enhanced productivity, happiness and employee retention.”

An investment for ID.me

McLean-based ID.me, a company that makes software to verify the credentials of servicemen and women, first responders and others eligible for specialty discounts at retail outlets, has raised its largest round of venture capital to date.

The fresh infusion of cash includes $7.5 million from USAA, Blu Venture Investors, K Street Capital and other institutional investors. The round also technically includes a $3 million convertible note signed in January 2013 and $2.5 million in venture debt from Silicon Valley Bank.

Founder and chief executive Blake Hall said the money will be used to hire engineering and sales staff as ID.me continues to develop its software platform and pursues deals with additional retailers. So far, its ID.me widget can be found on Overstock.com and Under Armour for military personnel to verify their service and collect discounts.

Hall, a decorated war veteran and Harvard Business School graduate, started the company as a daily deals site for military families called TroopSwap. The business never gained much traction, forcing Hall to change his strategy and product.

“I’m the first to admit I made a wrong move taking a bet on an unproven business model,” he said.

But ID.me is on more solid footing these days. In addition to widgets found on third-party sites, the company is now developing a Web site where teachers, students, veterans, first responders and other specialty groups can find discounts at retailers around the Web.

“You might not know all the other places where you could use that persona to save,” Hall said.

Capital for Cobrain

Cobrain, a company that suggests merchandise to buy based on your shopping history, has raised $3 million from a slate of undisclosed angel investors, the company reported last week.

The Bethesda-based start-up is the brainchild of Robert McGovern, the serial entrepreneur behind CareerBuilder.com and took the company public before selling it for a cool $450 million. McGovern contributed to the round.

Though many retailers offer recommendation engines on their Web sites, Cobrain aims to expose shoppers to new brands based on the cost, color, style and other attributes of items they have purchased in the past. Its software uses retailers’ data and electronic receipts to determine a shopper’s individual preferences.

To date, Cobrain is working with more than 300 retailers, including Macy’s, Nordstrom and Gap, according to a news release.

2U sets share price

Landover online education company 2U intends to raise as much as $137.2 million in its initial public offering, according to documents filed last week with the Securities and Exchange Commission.

The company has priced its shares at $13 a piece, though that figure is subject to change. It will be listed on the Nasdaq Global Market under the ticker symbol TWOU.

The company partners with established universities to create online versions of their existing programs. For example, 2U developed an online version of Georgetown University’s nursing master’s program in 2011.

Since its creation, the company has expanded into undergraduate courses. Its programs allow schools to enroll students and collect their tuition dollars without the costs and physical limitations of maintaining a bricks-and-mortar classroom.

Filings show the company has grown its revenue in each of the last three years, including $83.1 million in revenue for 2013. It has also posted net losses for each of those years, including a net loss of $28 million for 2013.

Steven Overly covers the business of technology, biotechnology and venture capital in the Washington region for The Washington Post and its weekly Capital Business publication. In that capacity, he has written about start-up struggles, investment trends and major drug discoveries.
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Chip Paucek is chief executive of 2U, a company that creates online versions of established degree programs. (2U/2U)

Another co-working space for start-up companies and other small organizations seeking a bustling, collaborative work environment has opened its doors — in Reston.

Refraction offers many of the amenities found at similar venues, such as 1776 and WeWork in the District, including desks and conference tables that can be reserved on a daily, monthly or long-term basis. But unlike many of the co-working spaces to crop up in recent years, it will serve a distinctly suburban crowd.

“In the city, you might find 20-somethings with an idea or early-stage concept that will be well served by [the] collaboration and mentoring that 1776, WeWork and other options can provide,” founder James Quigley said.

“The Reston/NoVa entrepreneur tends to be a little older, has more of a track record, and is building a company already past the ideation phase. These are the individuals that will probably find Refraction an ideal home,” he added.

The name Refraction originates from the way light refracts when it passes through a medium. Think, for example, of white light passing through a prism.

Quigley moved his own mobile apps company, Canvas , into the Refraction space in January, along with several tenants who were part of a previous co-working space. The 17,000 square foot office in Reston Town Center will house 20 to 30 organizations with between one and 15 employees when full.

“It’s not currently designed as a moneymaker in the conventional sense, but as a forward-thinking approach to empower participating communities through collaboration,” Quigley said. “We are confident organizations that become a part of Refraction will benefit significantly, as will Canvas employees through enhanced productivity, happiness and employee retention.”

An investment for ID.me

McLean-based ID.me, a company that makes software to verify the credentials of servicemen and women, first responders and others eligible for specialty discounts at retail outlets, has raised its largest round of venture capital to date.

The fresh infusion of cash includes $7.5 million from USAA, Blu Venture Investors, K Street Capital and other institutional investors. The round also technically includes a $3 million convertible note signed in January 2013 and $2.5 million in venture debt from Silicon Valley Bank.

Founder and chief executive Blake Hall said the money will be used to hire engineering and sales staff as ID.me continues to develop its software platform and pursues deals with additional retailers. So far, its ID.me widget can be found on Overstock.com and Under Armour for military personnel to verify their service and collect discounts.

Hall, a decorated war veteran and Harvard Business School graduate, started the company as a daily deals site for military families called TroopSwap. The business never gained much traction, forcing Hall to change his strategy and product.

“I’m the first to admit I made a wrong move taking a bet on an unproven business model,” he said.

But ID.me is on more solid footing these days. In addition to widgets found on third-party sites, the company is now developing a Web site where teachers, students, veterans, first responders and other specialty groups can find discounts at retailers around the Web.

“You might not know all the other places where you could use that persona to save,” Hall said.

Capital for Cobrain

Cobrain, a company that suggests merchandise to buy based on your shopping history, has raised $3 million from a slate of undisclosed angel investors, the company reported last week.

The Bethesda-based start-up is the brainchild of Robert McGovern, the serial entrepreneur behind CareerBuilder.com and took the company public before selling it for a cool $450 million. McGovern contributed to the round.

Though many retailers offer recommendation engines on their Web sites, Cobrain aims to expose shoppers to new brands based on the cost, color, style and other attributes of items they have purchased in the past. Its software uses retailers’ data and electronic receipts to determine a shopper’s individual preferences.

To date, Cobrain is working with more than 300 retailers, including Macy’s, Nordstrom and Gap, according to a news release.

2U sets share price

Landover online education company 2U intends to raise as much as $137.2 million in its initial public offering, according to documents filed last week with the Securities and Exchange Commission.

The company has priced its shares at $13 a piece, though that figure is subject to change. It will be listed on the Nasdaq Global Market under the ticker symbol TWOU.

The company partners with established universities to create online versions of their existing programs. For example, 2U developed an online version of Georgetown University’s nursing master’s program in 2011.

Since its creation, the company has expanded into undergraduate courses. Its programs allow schools to enroll students and collect their tuition dollars without the costs and physical limitations of maintaining a bricks-and-mortar classroom.

Filings show the company has grown its revenue in each of the last three years, including $83.1 million in revenue for 2013. It has also posted net losses for each of those years, including a net loss of $28 million for 2013.

Steven Overly covers the business of technology, biotechnology and venture capital in the Washington region for The Washington Post and its weekly Capital Business publication. In that capacity, he has written about start-up struggles, investment trends and major drug discoveries.
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