With the rising number of startups in India, the business of shared workspaces is emerging, despite being an eluding one. Many established (and early) startups or even MNCs are spotted inside swanky properties of WeWork, CoWork, Innov8, Investopad, and Awfis across Bengaluru, Delhi (NCR), Mumbai and a few other cities.
Making money out of the shared-workspace brand is difficult both globally and in India.
WeWork had about a total revenue of $886 million while its cost stood about $1.8 billion in 2017.
Several companies in India evangelising the co-working business are running into losses. Innov8 had witnessed a hockey stick curve in losses during FY17.
Sequoia Capital-backed Awfis reported a loss of Rs 26.22 cr – a 230% increase as compared to the preceding fiscal. Meanwhile, the company revenue jumped by a staggering 1582% to Rs 18.2 crore in FY17 from mere 1.08 crore in the previous period.
The total expenses of Awfis mounted to Rs 44.4 crore in the financial year 2016-17 from Rs 9.1 crore in the previous FY. Importantly, the highest spending area for the company was rental which accounted for about Rs 13.6 crore in FY17, a significant increase from Rs. 2.7 crore during the previous period.
The Amit Ramani-led company follows two models. One which involves a joint venture model by leasing the space. The other is a management operator model, where Awfis works like a managing operator and takes a cut from the revenue.
In FY17, Innov8 losses shoot up by 156X while revenue grows only by 4.3 times. The Delhi-based company posts a revenue of Rs 1.95 crore in FY17 as compared to Rs 36.25 lakh in the previous fiscal.
Recently, workspace solutions provider IndiQube has raised $15 million Series A round led by WestBridge Capital.
Over the years, co-working space has largely been dominated by the global player WeWork and home-grown counterparts such as BHIVE, Innov8, 91springboard, Awfis, Stirring Minds, and others.
Since IndiQube has raised a sizeable round, the shared working space is slated for exciting competition between aforementioned players.
The benefactor of such intense competition, however, would be startups who look for working space at minimum cost.