Coworking Spaces Become Startup Incubators as WeWork Forms Stronghold in India
As WeWork becomes the largest coworking space provider in India, home grown Indian coworking spaces transform into nurturing hubs for startups
“Coworking” has become a style of working just as much as it has come to mean sharing physical office space with employees from another unrelated business.
The coworking segment in India is expected to receive $400 million in investments in 2018, according to a study by JLL. India is predicted to have over 11,500 startups by 2020 and all will be looking for office space with as little administrative fuss as possible.
The largest cumulative facilitator of this need for convenient office space will be WeWork – even in India. Founded in 2010, it last raised funding at a networth of $20 billion and is now looking to raise the next round at $35 billion, according to Rajeev Misra, head of SoftBank’s Vision Fund, which has so far contributed $4.4 billion making it the largest investor in one of the largest coworking space providers in the world. The company entered India in 2017 in partnership with Embassy Group, a leading office space developer. WeWork has the second largest coworking space in India behind GoWork, Gurgaon. Present in Bengaluru and Gurgaon the brand plans to set up in Delhi, Chennai and Hyderabad.
As WeWork is on its way to becoming the largest coworking space provider in India, whiffs of consolidation are rife in the air – word is home grown Indian coworking spaces maybe looking for M&A possibilities.
For those smaller coworking space providers it has come to mean offering other services and targeting groups not looking for too many fancy features (WeWork Galaxy in Bengaluru reportedly has a Jacuzzi and a swimming pool).
For example, an entrepreneur working out of coworking space, SproutBox, is only looking for simple efficiency. “This is the fourth coworking space I tried. SproutBox is good for me because it has ample space away from the ruckus created by the city. They have comfortable chairs and those small things like compatible plug points are available here.”
In addition, in the face of unbeatable WeWork scale, other coworking spaces are differentiating themselves by offering ‘space+mentoring’ or even space in exchange for piece of the business.
91Springboard is a pioneer in this segment; it acts as coworking space provider, a mentor and a micro VC. With cumulative seating for over 9500 across Bengaluru, Mumbai, Delhi NCR, Pune and Goa the company regularly hosts networking events for entrepreneurs and has so far invested in startups like Squad, NeoStencil, and Logic Roots. 91Springboard has raised about $20 million from Khattar Holdings, ThirtyThree Investments Sandway Investment Ltd, Pearl Brook Holdings, AMA Holdings, Silo Holdings and Al Nour for expansion purposes.
Huddle is a 60 workstation, co-working space in DLF Cyber City. Huddle fulfills the needs of startups, SMBs, and corporates by providing flexible workspace, convenient accessibility and proximity to clientele. It offers office space and an incubator with a core focus on mentorship. Huddle brings together startups and industry leaders to provide intellectual, social and financial capital for its clients.
Smartworks is another coworking space provider and aims to work with as many freelancers, startups, small teams, and large corporations with lean teams, as possible. Neetish, a founder of the business says, “We understand how our customers need to cut corners to build a successful business. This is why we’ve introduced the SmartVenture program. This program helps entrepreneurs focus just on their business during the initial six month incubation period, while not worrying about the operational bits. We do this by offering, phased pricing and equity sharing. “We have customers who want to use our workspace and services, but can’t afford it as yet. If they’re ready to offer us a nominal equity in their business, we would love to see their business grow within our premises”.
Some office space providers aim at creating a cozy, nurturing homey environment. The SproutBox Suryavilas (Okhla) space is a full time incubator working closely with food, food tech, and hospitality companies and connects their clients with lawyers, tech experts or chartered accountants if required. The space is open to freelancers, startups and corporates; the SproutBox owners are happy to host any company with a team smaller than 40 people. Gagandeep Singh Sapra, cofounder of SproutBox said, “We have set this limit because we want to aid a company’s growth. We will be your family - your mentor”.
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