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The startup scene has been burgeoning in recent years and this has created the major need for flexible and cost-effective workspaces. This exponential rise in the demand for the coworking spaces has several big investors lining up for funding the coworking spaces. There are several coworking space providers in India who have been getting major investments from big investors. One such example is of Awfis, a provider of coworking spaces in India. They raised huge financing of $20 million (Rs. 128 crores) from the reputed investor firm, Sequoia Capital India in 2017. This is indeed the biggest amount which has been received through a single round of funding by a startup company.
The coworking spaces are shared offices which are being occupied by the professionals from different companies and they operate simultaneously. The startup culture is thriving in India and the country is expecting to have 11500 startups alone in the tech niche by 2020. This rising number of startups has considerably raised the demand for flexible and low-cost workspaces with world-class infrastructure and amenities. Hence the coworking segment is flourishing big time. As per a report published by a reputed real estate consultancy Colliers International, the coworking space providers have taken around 1.5 million square feet of office space in India. The excitement is such that the American coworking space provider startup WeWork has enthusiastically entered the Indian market to explore the high potential in the coworking segment.
The model of coworking space is quite straightforward. The provider leases office space from a real estate developer or marketer and then rents it out to several startups and companies in a flexible manner on the basis of the number of desks or the number of hours being used. The membership fees for the coworking spaces vary from Rs. 3,000 to Rs. 10,000 per desk per month. The prices depend on the basis of the services offered and the location. The coworking spaces are much more than just world-class office spaces as the several bright startup founders share this particular facility with many other like-minded independent professionals like writers, graphic designers and app developers. Some of the booming and rapidly growing coworking spaces in India are WeWork, CoWrks, iKeva, 91 Springboard, The Executive Centre, Skootr, Avanta Business Centre, Regus, Awfis and Smartworks. All of these booming coworking spaces have opened their centers in the metropolitan cities in India like Delhi NCR, Mumbai, Bengaluru, Hyderabad, Jaipur etc.
Reasons why coworking segment is attracting more and more investors
The angel investors have several good reasons to invest in the booming coworking segment. They feel that the coworking spaces can successfully engage people and the organizations to their workplaces. The coworking spaces have been playing strong on a couple of significant global trends- sharing communities and economy. The sharing economy usually has several entities which share the assets. While sharing the coworking spaces, there are regular interactions that happen between the professionals and companies which lead to the formation of informal but distinct communities.
Coworking spaces are cost-effective and hassle-free
Working from a shared office is typically cost-effective as compared to renting of a private office. Startups that are lesser than 50 employees strong can save up to a considerable amount of rental costs by adopting a coworking space. At least, 30% or even more can be saved on the office rental and overhead costs. Also, this is quite flexible and hassle-free as all the operational responsibilities and hazards are being taken care of by the coworking office provider administration. Thus, the members can completely concentrate on their core business without any distraction of petty responsibilities which is not the case when it comes to the traditional offices. While enjoying all these conveniences, the members can also take the opportunity of networking with several like-minded investors and startup entrepreneurs.
The users of the coworking space bangalore enjoy a long list of amenities like high-speed internet connectivity, coffee, food, tech support, printing, scanning, and several other services. Thus, this is an exceedingly profitable proposition for any business, investors or any other stakeholder. Sidharth Menda, CEO CoWrks said in a statement that the coworking space business model is absolutely justifiable and already creating enough revenues & profits to make the business sustainable.
The coworking spaces provide great opportunities for networking with the entrepreneurs and professionals and in several cases with the investors. There are several coworking spaces which also organize weekly activities and events for engaging the members and to facilitate networking. Sometimes certain non-professional connections are formed which proves to be highly successful. This is a proven fact by the experts that community building in the coworking spaces is of greater significance than just availing the office space.
With so many benefits attached to the coworking spaces, the segment is flourishing big time with millions of square feet and dollars and evolving as a hot property in India.
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