PROVIDENCE, R.I. (WPRI) – When wellness tech company Virgin Pulse bought Providence software firm ShapeUp nearly two years ago, CEO David Osborne had no plans to stay in Rhode Island.
“I was thinking the exact opposite,” Osborne told Eyewitness News. “Originally I thought, we’ll move everybody to Framingham,” he said, referring to the Massachusetts town where the company has been headquartered.
Last December, however, Osborne announced that ShapeUp founder Rajiv Kumar and Gov. Gina Raimondo had convinced him not only to keep the Rhode Island office open but to add nearly 300 jobs there through 2021. And on Monday, he announced that Providence would replace Framingham as Virgin Pulse’s global headquarters.
“It’s a great spot,” he said. “We’re thrilled.”
A division of British entrepreneur Richard Branson’s Virgin Group, Virgin Pulse makes software that companies use for employee wellness programs. The company just moved into refurbished offices on the third and fourth floors of the Providence Journal building on Fountain Street, with roughly 100 employees there now and 130 expected by the end of 2017.
The deal to keep Virgin Pulse in Rhode Island last year included up to $5.7 million in state incentives if the company meets job milestones. As part of the agreement to make Providence its headquarters, the company will now be eligible for up to $500,000 in additional state money for job training, according to the R.I. Commerce Corp., which said an analysis it commissioned shows new revenue will more than offset the subsidies.
“Virgin Pulse could have planted the flag for its global headquarters anywhere,” Raimondo said in a statement Monday. “In choosing Rhode Island, Virgin Pulse is making a long-term commitment to our state and will create opportunity for hundreds of people at all levels,” she said.
Osborne, who formally announced the headquarters decision at Monday night’s Greater Providence Chamber of Commerce annual meeting, cited a number of reasons for the company’s decision to choose Providence.
“One, it’s a pretty cool town,” he said. “We looked at our growth trajectory, our hiring plans, we realized we needed to be in a city; we immediately thought about Boston. Rajiv convinced me otherwise, to come and look at Rhode Island. We have a front-row recruiting seat to all the great universities here.”
Kumar, who now serves as Virgin Pulse’s chief medical officer, said the biggest reason Providence was chosen was access to the work force it needs going forward. The company said it has received more than 3,600 applications for jobs in Providence this year, and had far more workers than expected request a transfer to Rhode Island from other offices.
“If we want to attract Millennials fresh out of college to come and bring energy to our company, if we want to get the best and brightest, this is the place to find them,” he said. “People are moving to cities. They want to be part of a culture, they want to have access to great entertainment and great food and a city with a great lifestyle, and this is a place where we can find all those things.”
“I believe in the city. I believe in the state,” Kumar added. “We saw at ShapeUp over the years just how supportive the environment, the culture, has been for our business. And I knew that Virgin Pulse would thrive in a place like Rhode Island.”
Virgin Pulse is now moving into roughly 48,000 square feet of space in the Journal building, which the newspaper’s former owner sold in 2015. (The Journal’s staff consolidated into one floor.) The offices have the flavor of a Silicon Valley tech startup, with lots of standing desks, offbeat design choices and a well-stocked kitchen. Nearby is the new office of GE Digital, another firm the Raimondo administration lured to the state as part of its bid to grow the local tech sector.
Virgin Pulse said a key part of its ongoing efforts to attract young works is an initiative it calls EPIC, short for Exceptional Potential Early-in-Career Employees. Eligible workers receive a career coach, a three-month training program, coaching sessions with senior leadership and preference for promotions.
Kumar co-founded ShapeUp in 2006 while attending medical school at Brown University. The startup won two local business-plan competitions and in 2008 received an innovation tax credit from what was then the R.I. Economic Development Corporation. It emerged as one of the state’s highest-profile tech firms before Virgin acquired it last year.
Standing in the new downtown Virgin Pulse offices on Monday, Kumar looked around and recalled his company’s far humbler beginnings more than a decade ago. “It’s a surreal day for us,” he said.Ted Nesi (email@example.com) covers politics and the economy for WPRI.com. He writes Nesi’s Notes on Saturdays and hosts Executive Suite. Follow him on Twitter and Facebook