Demand for co-working startups remains high in India

Photo: Mint

After a phase of rapid expansion, co-working startups are looking to raise fresh capital and turn profitable to support the next leg of growth, as demand for collaborative workspaces remains high in India.

The dynamics of collaborative workspaces are also changing and moving towards enterprise clients with long-term commitments, and building customized products, rather than chasing smaller startups and entrepreneurs, and leasing individual desks, or seats.

Top operators, such as WeWork India, Smartworks Coworking Space Pvt. Ltd, Awfis Space Solutions Ltd and Table Space Technologies, along with smaller firms, such as IndiQube and CoWrks, make up over 80% of flexible space leasing and are looking at strategic expansion through an asset-light or revenue sharing model, to burn less cash.

IndiQube, which had raised capital from WestBridge Capital India Advisors in 2018, is looking to raise $30-50 million to fuel expansion as the Bengaluru-based firm looks to nearly double its 2.5 million sq.ft operational space in the next 12-15 months.

“Larger enterprises are asking for bigger spaces. The momentum has built up and we need a new round of funding for further expansion. We are undertaking buildings that can be upgraded or converted to office spaces as well as distress assets stuck with lenders,” said Rishi Das, co-founder and chief executive officer (CEO), IndiQube. The firm has already turned profitable.

“While we continue to grow and hold on to our market share, the larger focus is on profitability. Capital is a big driver, on how fast or slow we grow. Unlike earlier, when we tried to grow fast, we are now looking at deals where the desks we are adding are funded by landlords, in fully-funded management contracts or revenue sharing,” said Karan Virwani, who heads WeWork India.

Even Bengaluru-based CoWrks, which had said last year that it will raise $50 million, is still self-funded and not raised any external capital so far. Abhishek Goenka, CEO, CoWrks, said while it will add 15,000-20,000 seats this year, no one is building speculatively anymore and are moving towards built-to-suit facilities.

Smartworks Coworking Space Pvt. Ltd, which turned profitable last year, and raised $25 million from Singapore’s Keppel Land last year, follows the traditional deal with landlords, and has started taking up larger spaces across the top nine Indian cities. “Today, everyone is focusing on profitability rather than just achieving the topline and there is no irrational expansion,” Smartworks founder Neetesh Sarda said.

Awfis Space Solutions Ltd, one of the largest and well-funded co-working startups, plans to set up centres in even smaller cities such as Kochi, Ahmedabad and Indore.

This article was first published on livemint.com.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.