Co-working platform Smartworks has been demonstrating strong growth in the last two fiscal years — its scale grew two-fold to cross Rs 710 crore in revenue in the fiscal year ending March 2023. However, the company’s losses also crossed the Rs 100 crore mark.
Smartworks’ revenue from operations surged 97.5% to Rs 711 crore in FY23 from Rs 360 crore in FY22, its consolidated financial statements sourced from the Registrar of Companies (RoC) show.
Smartworks provides managed office spaces by leasing properties from real estate developers and subsequently subleasing them to enterprises or companies. The company has a presence across Delhi-NCR, Kolkata, Bengaluru, Chennai, Pune, Hyderabad, and others.
Revenue from lease rental accounted for 97% of the total operating revenue which increased 97.4% to Rs 687 crore crore in FY23. The rest of the collections came from allied services.
On the expense side, the cost of depreciation and amortization turned out to be the largest cost center accounting for 40.5% of the overall expenses. This cost surged by 67.9% to Rs 356 crore in FY23.
Its employee benefits, finance, repairs, electricity, safety, custodial fees, and other overheads catalyzed the firm’s overall expenditure by 80.3% to Rs 880 crore in FY23 from Rs 488 crore in FY22. Head to TheKredible for the detailed expense breakup.
Expense Breakdown
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- Employee benefit
- Finance costs
- Depreciation and amortisation
- Repairs to building
- Electricity
- Safety security
- Custodial fees
- Others
The increase of 80% in overall expenses resulted in a 44.29% surge in losses which reached Rs 101 crore in FY23 as compared to Rs 70 crore in FY22. On a unit level, it spent Rs 1.24 to earn a rupee in FY23.
Gurugram-based Smartworks has raised over $50 million to date including its $25 million Series A round from the Singapore-based Keppel Land. The company is also reportedly in talks to raise $70-90 million.
With its focus on managed office spaces besides co-working, Smartworks has sought to serve a larger segment of the market, particularly larger firms that are not so enamored with a co-working option. However, as evident, that can drive up costs a lot more, leaving the firm to travel an extended runway to profitability. With strong revenue momentum and a commercial market that is in very healthy condition, it does look like the firm will be in the black soon, and seeking newer avenues and markets for growth.
