How coworking spaces are overcoming challenges to drive growth in India

06 September 2019

How coworking spaces are overcoming challenges to drive growth in India

  • Your Story

There are over 850 coworking spaces in India, and while most of these are concentrated in Delhi, Mumbai, and Bengaluru, over 179 are in Tier II and III cities. But despite the hassles of maintenance and operational expenses, the coworking sector in India is thriving and growing.

Coworking spaces today have become very popular and are seeing an exponential growth in India. In fact, India is the second-largest market for flexible workspaces in APAC, second only to China.

Anup Jain, Managing Partner, Orios Venture Partners, an early-stage VC fund, works out of WeWork, a coworking space, which has office spaces in Bengaluru and Gurugram. “It just makes it simpler. It is a good space, and we also get to work closely with startups,” he says. 

Anup adds that it also gives them the opportunity to collaborate, which cannot be found in single office spaces. “And not to mention that startup founders don’t have to worry and keep aside their already limited funds for operational expenses,” he says.

While coworking spaces were initially preferred mostly by smaller companies and startups, today they are also preferred by large and medium-sized businesses for their affordable infrastructure and business opportunities.

The space is also not restricted to larger cities, but tier II cities like Chandigarh, Ahmedabad, Kochi, Indore, and Jaipur too are following the trend. According to YourStory Research, there are over 179 coworking spaces across Tier II and III cities. 

As of August this year, coworking spaces raised $96.55 million across four deals. In 2016, the space raised $49.7 million across seven deals.

With India being called the second largest hub for startups globally, the coworking market is also saturated with players with different scale of operations.

Recently, OYO Hotels and Homes acquired Delhi-NCR-based Innov8 for Rs 220 crore, and made its entry into the coworking space.

New-York based WeWork, which is a major coworking player in India, recently filed its much-anticipated IPO prospectus, and rebranded itself as ‘The We Company’.

And it just isn’t just WeWork, CoWrks, Awfis or other larger players like 91Springboardthe Hike, InstaOffice; the space is seeing many new entrants.

Cash-guzzling operations 

According to Neetish Sarda, Founder, Smartworks, the operational challenges faced by most coworking spaces is to optimise the operational cost without compromising service their standards. They also look to standardise service offering across centres to deliver a better experience. This includes minimising turnaround time for resolution of client issues and attrition of blue-collar staff.

“There are significant operational costs (for coworking spaces) like managing people, getting the right mentors, and ensuring there are enough events and sessions around to help people collaborate. There also needs to be a strong team that manages each of the startups. It actually is more operationally intensive than one would assume,” says a real-estate builder from Bengaluru.

It is important for coworking spaces to be able to maintain a minimum occupancy level for most part of the year, and have a plan to expand in a strategic manner across geographies.

“One of the primary risks cited for all coworking players, including the large global players, is that the rental commitment to space owners is long term – over nine years – while the clients who occupy their spaces are generally for short to medium term (one month to three years). This results in capital inefficiency and demand-supply mismatch,” says Amit Ramnani, Co-founder and CEO, Awfis.

According to a JLL global survey, while the number of people opting for coworking space is on the rise, only around 40 percent of all coworking spaces are profitable. 

Just four years ago, this number was 32 percent. The survey also states that while typically most coworking spaces take a year to break even, turning profitable is a long journey.

What models work 

Sunanda Verma Bhatta, Co-founder, The Daftar, Pune, agrees that the business model of coworking is a little tricky as the operators buy long and sell short, and it is also a capital-intensive business.

“However, it is the case with all the business models having their pie of strengths and weaknesses. The idea is to maximise the strengths, and the best part of the coworking business model is that it is a cash flow-generating business, and hence can be developed as a great profitable business,” she says.

Amit says Awfis operates on a straight lease or managed aggregation model. He says currently only 30 percent of the seats are under straight lease model where they have taken up the property on a rental basis.

“We heavily engage with landlords under our Managed Aggregation Model (MAM). MAM is a unique business model that enables Awfis to partner with space owners of underutilised commercial spaces and strike a ‘no minimum guarantees’ deal – where space owner makes the investment on fit-out infrastructure and builds out a centre,” says Amit.

He explains that Awfis gets to acquire supply in an efficient way, which makes the model risk-averse and asset-light to a large extent. The owners not only get occupancy for their space, but also an opportunity to share the upside of our business.

“This also results in capital efficiency, which helps us to set up four-to-five seats for the same cost that other players use to set up one seat. Currently, 70 percent of our seats are under MAM, and we intend to increase it to 80 percent in the next 10-12 months,” says Amit.

On the other hand, Sudeep Singh, CEO of GoWork, says they don’t consider coworking as a merely infrastructure-based business that entails simply renting out spaces. He says their strategy is to enable coworking in its truest essence.

Explaining the strategy, Sudeep says,

“We are constantly creating more avenues such as introducing mentorship programmes for young professionals to enhance their skillsets, enabling investor relations, and facilitating B2B collaborations within the community to give young businesses what they’re seeking the most. Companies and individuals come to us not just for the amenities but also to benefit from the various programmes we run from time-to-time that help startups expand their network and scale.”

Differential pricing options 

While the models may be different, ultimately, it is to ensure they have a wider range of consumers and businesses. Generally, the price per seat per month ranges from Rs 10,000 to Rs 45,000, accommodating smaller startups to larger companies.

Oyo Rooms, which has also ventured into the coworking space market with Oyo Workspaces, is currently looking at three segments – low, mid, and high range.

In total, Oyo Workspaces is looking to immediately open its premises to over 21 centres with over 15,000 seats across 10 cities. The team already claims to have clients like Swiggy, Paytm, Nykaa, OLX, Pepsi, and Lenskart among others.

Companies like Paytm Mall, TVF, CS Direkt, TBO, and Coverfox are currently operating from the GoWork campus. And Awfis has the likes of Syngenta, Dun & Bradstreet, Duff & Phelps, Hinduja Global Services, Vodafone, Reliance, Hitachi, Blazeclan, Zomato, and Practo.

“This is the next phase of the coworking spaces, where everyone understands the value and even larger companies are looking at these for opening smaller offices,” says Anup.

A better option?

Despite these challenges, multiple factors are driving the flex workplace space in India.

One of the reasons being real-estate costs becoming significantly cheaper in this setup, which also enables fractional ownership.

“It is like Uber and Ola. People now can own a small ride and don’t even need to spend lakhs to buy a car,” says Anup.

A JLL, CBRE report says, coworking spaces have disrupted the commercial real estate segment in India with approximately 325-330 coworking operators in the top cities, and the average transaction size increasing from 52,000 per sqft in 2018 to 77,000 per sqft in Q1 of 2019.

Over 13 million people are expected to work out of coworking centres by 2020, with many corporates expected to allocate 10 percent of their office portfolio to agile workspaces.

And this can be attributed to its affordable pricing. For rents starting at Rs 10,000 per seat per month, shared coworking spaces offer several businesses lower utility bills and operational costs, and the advantages of collaboration and learning.

“Shared workspaces have created a transparent relationship with both the landlord as well as the end consumers. They provide unparalleled flexibility and mobility to their users,” adds Amit.

But while the demand is growing, the going is getting tougher. So, what do coworking spaces need to do to stay relevant? With the industry expected to reach a valuation of $2.2 billion by 2022, it sets a strong tone for growth within the sector.

In addition to this, Tier II cities are expected to grow to 8.5 million seats by 2020, and thereby result in further growth for coworking spaces.

In an earlier report, Samantak Das, Chief Economist and Head of Research and REIS, JLL India, said, “While coworking companies took up a modest 0.17 million sqm in 2017, the first quarter of 2018 itself has exceeded the annual tally of 2017 at 0.19 million sqm. The expansion plans of major players and the increasing appetite for this format from occupiers, property owners, and coworking operators should see annual transaction numbers triple from current levels over the next three years.”

What the future holds?

Currently, Awfis has 30,000 seats across 63 centres in nine cities in India, and is looking to reach 2,00,000 seats by 2022. It is also planning to tap Tier II markets like Bhubaneshwar, Kochi, Indore, Jaipur, and Ahmedabad. It claims to be profitable at an entity level since 2018, and plans to release its IPO by 2022.

Elaborating on GoWork’s plan, Sudeep says: “We plan to expand across the country with 50 campuses over the next five years with an immediate focus on Delhi-NCR, Bengaluru, and Mumbai, which have a thriving startup environment. We estimate the coworking industry to grow at a minimum rate of 33-35 percent YoY. Our strategy is to therefore let other players in the industry expand, settle down, and saturate, before we step in and take on the swiftly growing demand.”

India is the world’s youngest startup nation with more than 70 percent founders under the age of 35 years, and for the millennials, workspaces need to enhance creativity, contribute to collaboration and networking, offer flexibility, adopt latest technologies, and yet be affordable.

Rising to the occasion, that is precisely what coworking spaces are offering.

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How real estate expertise helped Amit Ramani build co-working startup Awfis

22 February 2021

How real estate expertise helped Amit Ramani build co-working startup Awfis

  • Posted by Arathy Nair

The idea of starting Awfis had been on Amit Ramani’s mind since his consulting days in the USA when he was working with Bank of America. On returning to India, he saw that SMEs and startups were constantly faced with the challenge of having decent infrastructure at cost efficient prices.

His goal was to start a business to provide new-age and technology-enabled workspaces that offer a superior alternative to owning conventional offices. Speaking about starting up a co-working space, Amit Ramani, Founder and CEO of Awfis, tells YourStory,

“We felt that commercial real estate operated in an archaic fashion with spaces being offered by developers and conventional business centers with long-term commitment and upfront deposits. This resulted in SMEs and startups having to settle for office spaces that are sub-standard and at inaccessible locations.”

Launched in 2015, Awfis has grown from 5,800 desks across 20 centers in 2017 to 35,000 seats across 70 centres now. Currently, Awfis has more than 28,000 community members and 1,500 partner companies spread across 10 cities in India.

Amit says the Indian commercial real estate market was fragmented and he saw an opportunity to partner with the landlords in a win-win situation that works well for the landlord, for Awfis, and also the end consumer.

He says, “With my experience in strategic planning, design management, facility planning, and workplace and business process improvement, coupled with some deep understanding of the Indian real estate ecosystem, I was convinced that with the right team, I could turn my idea into a successful business venture.”

Prior to starting Awfis, Amit was the COO of Nelson Global, a top global design firm, where he led the company across 37 locations and 600 people. With over 15 years of experience in areas of master planning, strategic planning and design, the thesis behind Awfis came off as a natural progression to him.

The solution was about providing ready-to-use, plug-and-play workspaces, which can be booked through a mobile app. The objective is to make it convenient to use an office or a work desk on ‘just-in-time’ basis without the complications of a fixed tenure or security deposit. The comprehensive solution claims to be providing everything that an office user will require, at extremely competitive costs.

Over a period, the CEO says, the startup has evolved with the market and has also started catering to the B2B side of the business by creating customised and fully-integrated independent workspaces for large corporates and MNCs.

Awfis has become profitable at entity level from November 2018, and is targeting to launch a public issue in 2022.

In August 2018, it raised $20 million in its Series C round from Sequoia India, The Three Sisters Institutional Office and Innoven Capital.

The Series D funding for Awfis came in August 2019. It raised $30 million from marquee investor ChrysCapital, while there was also participation from its existing investors Sequoia India and The Three Sisters Institutional Office.

This story appeared in the 22 March , 2020 issue of Realty NXT and is authored by Amit Ramani, Founder and CE0, Awfis. This article was originally published at

How Generation Z is reshaping the coworking culture

20 February 2021

How Generation Z is reshaping the coworking culture

  • Posted by Arathy Nair

The Generation Z has grown up in a world of smart devices that gives them ubiquitous connectivity and access to information across the globe at a quick voice command. These digital natives display unique, transformative consumption habits that have started to influence brands around the world.

Gen Z has an appetite for purpose and convenience and prefers opting for products or services at their own time and space. On the same lines, workspaces are evolving to become like any other on-demand platform such as Netflix or Amazon Prime, where the people are deciding how, where, and when they want to consume a product. The product is now being defined by their consumption.

According to research done by Business Insider Intelligence, Generation Z is more proactive, money-conscious, and pragmatic while demanding a fun and social environment that creates a huge rift in the way millennials prefer to apply their skills and work. This has necessitated the need for coworking space providers to introduce changes, suiting the needs and requirements of the newer generation.

While the 3 ‘COs’ of coworking—collaboration, community, and convenience—appeals to millennials, the Generation Z values another CO—consciousness. As a socially and environmentally conscious community, Generation Z is keenly in tune with the unfolding crisis of climate change. They value spaces that are sustainable and appreciate initiatives such as waste separation bins and energy-efficient spaces.

The importance of wellbeing, flexibility, and choices

This generation is inclined to have a fun social space but not without the reinforcement of a positive culture, mental well-being, and flexibility for those who are working in these new spaces. There is a pertinent need to create a well-designed office space that supports communal growth and work ethics, which goes beyond a single category of population and is suitable for all the generations looking to make coworking their workspace of choice.

This story appeared in the 16 March , 2020 issue of YourStory and is authored by Sumit Lakhani, CMO, Awfis. This article was originally published at :

7 reasons why the coworking future looks bright

14 October 2019

7 reasons why the coworking future looks bright

  • Posted by Awfis Editorial

The past few years have witnessed an unparalleled success for the coworking juggernaut in India. This accelerated growth has stemmed from the revolutionary shift in the Indian traditional workspace to a more flexible, accessible and affordable coworking space. In the first quarter of 2018 itself, coworking had transacted about 2 million square feet commercial realty; way ahead of the 1.8 mn sq ft in 2017. The industry is expected to grow 3X by 2021, leading to massive opportunities for the coworking business in the country. Coworking has now established itself as a fundamental part of the CRE leasing activity and a full-fledged sector in its own right, giving tough competition to conventional office spaces. Additionally, fuelling this considerable progress is the rising entrepreneurial spirit, which is seeping into Tier II cities as well. Tier II markets are expected to grow to 8.5 mn seats by 2020. Thus, given the strong demand and impetus that it has been able to garner, it wouldn’t be an exaggeration to suggest that the best is yet to come for a segment which is still in the nascent stages of development. Also Read How coworking startup Bhive faced a near shutdown and scripted a turnaround Inherently collaborative and flexible by nature, coworking has observed many new trends and unique practices over the years. Fierce competition and ever-growing demand have led to several leading players putting on their brainstorming hats to ensure sustained market relevance and retain clients with value-added benefits. While the past few years have unearthed some strong trends, which have redefined the future of the segment, we expect the momentum to strongly continue in 2019 as well. Here are the top seven trends that we foresee will become the game-changes in the industry. Coworking players handholding developers in managing experiences The business relationship between a developer and a coworking space provider is now no longer confined to just leasing the commercial space. Not only are coworking spaces going beyond setting up workspaces and partnering with developers to enable them to get higher returns, they are also handholding developers by marketing and representing other floors in the building to clients on conventional lease. Coworking players are curating unique experiences and engagements for building tenants by providing state-of-the-art amenities like gyms, cafés, creches and managing the complete building ecosystem by bringing alliances, events and community focus to the occupants. Coworking players foraying into coliving Expansion and business diversity is the key to sustained growth for any company. While coworking space providers have successfully bridged the gap between supply and demand in India’s office spaces, this has now also extended to the residential real estate market wherein millennials are now getting used to the concept of coliving. This is a perfect arrangement to target millennials whilst solving the problem of traditional accommodation with all-inclusive amenities and community events. While this is still untested waters, we look forward to seeing more use cases in 2019 and evaluating its success. Deeper technology integration The traditional desk will likely be non-existent in the next three years, with wearable technology and AI gradually taking over coworking spaces and transforming them into autonomous workspaces. Smart access, smart meeting rooms and smart receptions have already forayed enabling cloud-based access system, facial recognition and real time security monitoring. Virtual assistants, AI powered ambience and temperature control and touch screen-based collaborations are improving user experience. The laptop and smartphone will become redundant as voice activated systems, wearable technology including wearable glasses, embedded chips, and wrist devices connected with Internet of Things (IoT) will take centre-stage and the connection of working professionals with fixed work desks will become a passé. Video technology and connectivity speed will ensure real presence without travel. Artificial intelligence will, in fact, even corroborate furniture shape, size and use as per user accumulated data. Rise of ‘work near home’ programmes The number of people preferring to live close to their workplaces or vice-versa is on the rise and “walk to work” is a trend that is quickly picking up in metro cities as it saves productive man hours instead of losing time to traffic congestion for hours while commuting to work. Owing to multiple locations, inter-city as well as intra-city, coworking spaces are the solution to reduce commute hour and provide both personal as well as business benefits. In order to provide more employee friendly policies, companies have been exploring the option of allowing employees to “work from home.” However, due to inherent challenges like a. Distractions at home b. Unavailability of right infrastructure (high speed internet, printer, desk space) c. Lack of social interactions/peer to peer engagements, there is a significant loss in productivity. This is prompting more and more companies to explore “work near home” – allowing employees to work remotely out of shared spaces while having access to effective office infrastructure. Adoption of flexible and mobile solutions The number of transactions for “just-in-time” usage of meeting rooms and mobility passes has increased three folds over the past two years, and for most players, it is growing at the rate of more than 12 percent per month. Businesses today are expanding to multiple geographies and servicing clients throughout the country. As a result, the workforce cannot always be expected, and required, to work out of a handful of central locations. The current workforce needs to be geographically dispersed as well as to be on-the-move as per the demands of the job. Millennials and Gen Z employees are seeking flexibility, mobility, collaboration and options that help them work real-time and untethered. Shared workspaces enable flexibility by providing solutions such as national pass, roaming and bulk meeting room hours to work out of any location, without any restriction and hassle of booking each time. Virtual offices benefit businesses based out of small towns, looking to setup a professional address or have a footprint in larger cities/ metros as their central business districts. Holistic enterprise solutions Shared workspace providers are foraying into creating and managing independent offices for enterprises along with running the coworking business. The process starts right from identifying a suitable space to construction, customisations and providing complete back-end support on technology and operations of the office space. This is a hassle-free way for an enterprise to outsource the designing, building and managing of their “own” office space thus allowing them to focus on running their business and not their office. Platform for collaboration Coworking spaces not only provide real estate solutions and hassle-free management but also offer an ideal platform for members to leverage business opportunities. With so many diverse companies sitting next to each other, the interactions are seamless and collaborations aplenty. Often times, the collaboration also happens between the coworking space provider and the clients sitting within through retailing and sampling of products and services. The clients get real time feedback from the larger community and opportunity to test the market with varied demographics. The workplace transformation has begun in earnest and will see some major transformations in the next 5-7 years as people’s lifestyles evolve, technology advancements take place at a fast pace, office commute times increase, and health and well – being takes centre stage. This will place the office worker at the heart of all office space solutions.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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