Office App Makers Cashing In on Pandemic Safety Needs

Investors are pouring money into phone apps that enable companies to monitor employees’ movements and ensure they are complying with social distancing and other Covid-19-related health protocols.

Employers can tell from a glance at the screen whether a conference room has exceeded the number of employees who can safely meet, or whether too many people are on one floor. Workers can also use these apps to take precautions like checking how many colleagues are using the gym, or how recently the cafeteria was sanitized.

While apps with similar features have been available for years for office security or convenience purposes, landlords and big corporate tenants are giving these tools a fresh look during the pandemic. This is especially true as the recent rollout of vaccines in the U.S. raises the prospect that millions of workers could return to their office this year.

In one of the biggest investments in this sector, real estate software and data firm VTS is acquiring Rise Buildings, a Chicago-based startup that developed a mobile app already used in over 130 million square feet of office space. VTS, which provides online tools for managing leases to landlords, is paying about $100 million, according to people familiar with the matter.

“In the return-to-work every owner has to make sure their tenants know what’s going on,” said Nick Romito, VTS chief executive.

Other mobile office app firms, which are part of the expanding proptech business, are also experiencing growing demand from landlords and interest from investors.

Lane, which launched in 2014, closed its first venture capital funding round in May, raising $10 million. The Toronto-based firm is used in more than 300 buildings in eight countries. It expects to announce another round in the next few months, according to co-founder and chief product officer Kofi Gyekye.

Big landlords like Brookfield Office Properties, Oxford Properties and Tishman Studio have signed up with Lane this year, Mr. Gyekye said.

Some office workers are bound to be uneasy with additional corporate scrutiny of their movements through these apps, and some employee advocates have already raised this issue.

Rise Chief Executive Prasan Kale said privacy is a top priority and that the firm collects and aggregates data in a way that individuals are anonymous, he said. Employees can also opt out.

“You can never download the app if you don’t want to,” Mr. Kale said.

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Rise says most workers opt in because they recognize the health benefits, such as enabling workers to alert building staff about arriving visitors. If too many are arriving at any given time, passes won’t be granted. Or if workers see unsafe conditions, apps provide a quick way for them to alert building management.

Launched in 2018, Rise added 150 buildings to its client roster during the pandemic for a total of 350 properties, Mr. Kale said.

Before the pandemic, mobile office app firms marketed their products to landlords as an amenity for tenants and their employees. They were used for a range of services, from booking conference rooms to ordering coffee or finding lunch companions.

“We began researching the category about one year and one half ago,” Mr. Romito said. When Covid-19 hit, VTS stood back to see if the category was “going to die really quickly” or whether the pandemic would “shine a massive light” on landlords’ need for tools that communicate directly with all their tenants and employees.

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Landlords say they are hoping office apps will give them critical data on how much their tenants are using their buildings. This will help them identify which ones are expanding or might be in danger of leaving, landlords say.

“In a post-Covid or living-with-Covid world, they’re going to have to up their game,” said Charles Garbarino, chief executive of HqO, an office app firm that raised a $34 million funding round in 2019.

Write to Peter Grant at peter.grant@wsj.com

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