Co-working space provider Awfis raises $20m from Sequoia, others

Awfis Space Solutions, a home-grown co-working space provider, has raised $20 million in a Series C funding round from existing investors Sequoia Capital, Radha Kapoor-led The Three Sisters: Institutional Office (TTS:IO) and Temasek-baced venture debt fimr InnoVen Capital, according to a report in The Economic Times.

Sequoia had also led the $20-million Series B funding round for Awfis in April last year.

Awfis will use the proceeds from the latest financing round to expand operations in new cities, especially tier-II, and follow a ‘managed aggregation’ model to ensure better capital efficiency.

The startup has scaled up to 25,000 seats across 55 centres compared to 5,800 desks across 20 centres in July last year. “The goal is to reach 40,000 seats across 90 centres from current 25,000 desks over the next one year,” the report quoted Amit Ramani, founder of Awfis, as saying.

The latest round also takes the valuation of the company to over Rs 900 crore, the report added.

Awfis was jointly incubated by Ramani and TTS:IO, a family office led by the three daughters of Yes Bank’s Rana Kapoor, with a total corpus of $11 million. It follows two models – a joint venture model by leasing the space and the management operator model, where Awfis works like a managing operator and takes a cut from the revenue.

A co-working space is usually an open floor-format office with shared spaces for meetings, networking and collaboration. Reduced costs, no fixed capital investment and increased flexibility are the foremost reasons for the rising popularity of shared spaces. It is anticipated that by 2020, co-working spaces will overtake the traditional office format.

The co-working segment in India is expected to receive $400 million in investments by 2018, said The report “Future of Work – The Coworking Revolution” prepared jointly by Confederation of Indian Industry (CII), JLL India and WeWork. Although there are less than 100 branded co-working spaces operating in India, this number is expected to increase by four times over a period of three years, the report added.

At present, there are approximately 300 (branded and unbranded/organized) shared workplace operators in India, operating almost 720 centres across urban India. The potential market size for the co-working segment across India currently stands in the range of 12-16 million seats.

Some of the recent notable deals in the space include Bengaluru-based IndiQube’s $15-million (around Rs 100 crore) funding round led by India-focused private equity firm WestBridge Capital in June, and Delhi-based 91springboard’s funding round that saw participation from Sandway Investment Ltd, Pearl Brook Holdings, AMA Holdings, Silo Holdings and Al Nour in September last year.

Other players operating in the space include Blume Ventures-backed BHIVE, Y-combinator-incubated Innov8, InstaOffice, AltF Coworking, and New York-based WeWork, which is set to open its first centre in Bengaluru.

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