Co-working spaces are trending in India

By Anusha Ashwin

Co-working spaces are bringing about a paradigm evolution in the startup ecosystem. Entrepreneurs using these spaces believe that co-working spaces not only save the effort in setting up an office but also lead to expanding the network, and as a consequence you tend to hire faster, get work done faster, get feedback faster and above all can target at growing faster.

As per startup market tracker Tracxn there are 61 co-working spaces in India, of which 16 were set up in 2016. The impact of this booming market can be felt from the news that surfaced in September, this year. One of the top 10 most valued startups globally, New York-based WeWork, a tech enabled platform offering collaborative office services for entrepreneurs and small businesses, forayed in India this September. WeWork signed an operating agreement with India’s leading office space developer Embassy Group. The two companies have plans to build a 6 million sq ft network over the next five years, beginning with Bengaluru, Mumbai and National Capital Region (NCR). Embassy will draw upon WeWork’s technology, design and global network of communities and also invest around $150 million into WeWork India. WeWork is believed to have entered India at a time when collaborative office spaces are becoming popular with the number of independent professionals among the urban workforce rising rapidly.

Recently, Mumbai-based Hubtown, formerly known as Ackruti City, partnered with India’s office space provider Awfis Space Solutions to create a co-working office at Akruti Trade Centre, a commercial property owned by the real estate firm in Mumbai’s Andheri East. Awfis Space Solutions will convert the 12,000 sq ft space into a 200-seater office area targeting startups or those looking for a flexible workspace for a limited period. In this partnership, Hubtown, which has entered into a revenue sharing model with Awfis Space Solutions, expects the concept of shared workspaces to catch up in the next three to four years and says that it is looking at replicating the model in other buildings as well. Another major client is SoftBank backed e-commerce major Snapdeal, who has booked a complete floor, with a capacity of about 90 seats. Awfis expects more startups to follow suit.

Amit Ramani, CEO and Co-Founder of Awfis Space Solution, is so bullish on co-working spaces that he has now decided to convert underutilized spaces into grade A office spaces. Recently, Awfis converted its Lower Parel industrial mill into a premium co-working space and has also converted a shopping center in Mumbai’s commercial hub Powai as a co-working space. Currently, Awfis operates in Mumbai, New Delhi and Bengaluru, and in the coming months, it plans to expand to Pune, Hyderabad and Kolkata.

Early movers find success

Shivani Kakkar, Co-Founder of Bengaluru’s workspace provider CoWorkIndia, has another perception on the benefits of such spaces. She says, “CoWorkIndia was created to usher in the ‘future of work’ in India. We foresee a future of freelancers, remote workers and distributed work at a gargantuan scale. In the future, you would walk or cycle into your neighborhood co-working space and work at high productivity without the usual distractions at home. With your office in close proximity to your home not only your quality of life improves significantly, and instead of commuting you spend quality time with your kids and spouse. Lots of companies allow their employees to work from home for a few days in a week. These employees willingly spend money from their own pocket to work out of our co-working space as it improves their productivity as compared to working from home.”

Young entrepreneurs at CoWorkIndia

“Co-working has a direct impact on neighborhood economics. When we started providing co-working spaces in Bengaluru’s HSR layout in 2010, it was not a popular location with startups. But in the last six years, we have pulled in more than 400 companies to HSR layout. Many of our alumni have grown big and moved into their own offices in HSR Layout. With 50+ Series A companies, HSR layout is considered the startup hub of Bengaluru and we have played a small role in making it happen. I think the government would soon realize the innovation that happens when you get 50+ founders in one single building. Co-working supercharges a neighborhood’s economy,” says Kakkar.

The change in the realty sector has undergone a paradigm shift with co-working spaces. Historically, the idea of co-working spaces was more about providing short-term solution by property owners for their long-term clients. A small area would be offered on rent to provide startup entrepreneurs an incubation space for a few months or a year till the building is ready. Now the real estate firms have indeed turned this into a business proposition. Commercial property owners now believe that the concept of shared workspaces will find more takers in tier II and tier III office buildings where the rentals are relatively low. Co-working spaces typically provide beneficial alternatives to standard commercial leases, particularly early stage companies, with evolving space needs.

Observing the growing trend in the co-working space Hyderabad-based Monika Misra set up iKeva, a plug-and-play workspace facility. Misra comments, “iKeva from its inception had the sole intention of becoming a business enabler for its clients/members, providing productive workspaces for small teams, with a layer of community and member benefits. It is our endeavor to create a great work environment where teams can work, grow, have fun and learn, with sufficient opportunities to network with like-minded professionals. We believe that workforce composition and needs are drastically changing and to be able to match such needs and trends, a holistic workspace is the only solution. iKeva continuously aims to reinvent its product and services to ensure that it meets the needs of a dynamic workspace from remote workforce to flexible users to workforce on the go.”

iKeva’s success in providing co-working spaces can be measured by the fact that not only over half of its users/members are start-ups/freelancers and consultants, but also that typically there is an overwhelming response every time Mishra opens a new center, with wait-list for the workspace in most cases. “Our members love that we at iKeva provide extremely productive workspaces customized to their needs; with a strong layer of community - where members get to network, have fun, learn from knowledge sharing events and give back to community via CSR activities; and an array of member benefits from discounts in hotel, restaurants, gyms and spas; to curated directory of experts like lawyers, accountants, HR consultants, etc; to great deals from AWS, Paytm, Health Insurance and many more, all which is designed to make a start-up entrepreneurs’ life easier, more productive and save costs for them along the way,” adds Mishra of iKeva.

Startup meet at iKeva

Being in the business of co-working spaces, Misra has an in-depth knowledge on the market size and its potential for growth. She says that the co-working or shared workspace as a segment is growing at a breakneck speed, with new co-working space providers coming into the market every week, her current estimate is 10,000 co-working spaces will be functional in India by the time 2016 ends. “There is tremendous demand for productive workspaces both from start-ups/small businesses and large corporates. I expect that the real players will emerge over a period of time, which would depend on their focus on co-working spaces as their core business and providing real value to the customers. The emergence of viable players will also depend on their ability to understand customer’s ever changing needs, presence of a reasonable network across several cities and of course keen focus on unit metrics.”

Besides allied services are also cashing on the boom. These co-working spaces have opened business avenues for fixed line and internet service providers, CCTV cameras and electronic appliances dealers, modern gadget manufacturers and suppliers, and IoT companies. Employment opportunities have also been generated for interior decorators, hospitality, housekeeping and handyman service providers. Not that a trend of shared business centers is new to India but this is a step ahead in its offering and is set to pick up steam as a trend, as it is more customizable alternative to the budding startup ecosystem.