Are Awfis, 91Springboard & Innov8 Financials As Swank As Their Cowork Offices?

The key factors driving the adoption of coworking spaces in India are the lower cost, good infrastructure, and networking opportunities they offer. Coworking spaces are being availed of not only by startups but also by professional freelancers, emerging businesses, and large corporates.

But are coworking spaces startups themselves in a position to survive for long? This is what we have attempted to analyse in Inc42’s ongoing What The Financials [WTF] series this week.

Note: As the FY18 financial reports for the companies are not out yet, the analysis is based mostly on FY16 and FY17 data available in the RoC company filings.

Revenue Growth: Enterprise Focus Rakes In Better Money Than Startups

In FY17, Awfis reported a massive revenue growth of 1583%, raking in INR 18.2 Cr as compared to INR 1.08 Cr in FY16. Awfis saw the highest growth in revenue among the trio, overtaking 91springboard and Innov8.

In FY17, 91springboard too recorded huge growth in revenue —  1387% — making a total income of INR 19.8 Cr against INR 1.3 Cr in FY16. On the other hand, Innov8 registered a growth of just 438% with a total income of INR 1.9 Cr in FY17 against INR 36.2 Lakh in FY16.

The key driver of the superlative growth of Awfis and 91springboard is their technology led working model as well as their focus on establishing themselves more as enterprise-focused facilities rather than startup workspaces.

According to a February 2018 ET report, startups form only 15% of the clientele for Awfis, with the rest comprising large companies such as Vodafone, Mercedes Benz, and Orange Business Services as well as SMEs such as ReNew Power and Incred Technologies.

While the overall revenue growth was similar for both Awfis and 91springboard, there were substantial differences between their operating and non-operating revenues. In FY17, Awfis’ operating income was 99.6% of its total income, while for 91springboard, it was just 60%.

With non-operating income being a major revenue source for 91springboard, it is evident that the company is majorly dependent on non-recurring sources of income and not on its core operations. Thus, it is difficult to assess the long-term growth of 91springboard.

Awfis, on the other hand, is flying high on account of its core business, which is growing fast and may place the company at the forefront of the Indian coworking space.

Expenses Rise For All Three Companies

Awfis has done well on the expenses count. The company has been able to reduce its overall expenses in FY17, recording a 388% increase from the previous financial year. This is much less compared to the 5848% rise in expenses it saw in FY16 as compared to FY15.

91springboard registered a 1094% increase in its expenses in FY17 while Innov8 registered a 1087% spike in its spend.

If we dive deeper into the expense records of these companies, we find the three major areas of expense for these companies are:

Employee-Related Expenses


Awfis has been able to reduce its employee-related expenses in FY17. It registered an increase of 339% in its employee expenses in FY17, which is much less than the 9478% hike it registered in FY16.

Innov8’s employee expenses increased by 1934% in FY17. While at 91springboard, expenses in this category increased by 557% in FY17 compared to FY16.

Awfis had the highest employee expenses among all three in FY17, at INR 11.7 Cr, while 91springboard followed with a INR 7.12 Cr spend. Innov8 had the lowest employee expense among the trio of INR 92.91 Lakh.

Maintenance Of Office Spaces

Awfis also reversed the increasing trend in its office maintenance expenses, which stood at was INR 21.38 Cr in FY17. It registered just 404% increase under this head in FY17 compared to FY16. In that year, it recorded a syrocketing 32016% growth in it office maintenance expenses over FY15.

On the contrary, Innov8 showed a growth of 707% in FY17 in comparison to FY16, reporting a running and maintenance cost of INR 2.13 Cr. 91springboard, on the other hand, clocked an total maintenance expense of INR 12.21 Cr, 1414% more than that reported in FY16.

Awfis leads In Advertising Spend

Advertising expenses for Awfis were quite high compared to the other two in FY17. However, this could be attributed to the accelerated growth Awfis has seen in FY16 to FY17. The company’s total advertising expenses in FY17 was INR 2.08 Cr, a 1042% increase over its ad spend of INR 18.2 Lakh in FY16. On the other hand, 91springboard and Innov8 spent just INR 95.36 Lakh and INR 54.5 Lakh on marketing and advertising in FY17.

These numbers also indicate that competition in the coworking space is getting intense, with a number of coworking spaces mushrooming in India. This is compelling coworking companies to spend a large part of their budget on their marketing and advertising activities.

P&L Of Trio Nothing To Write Home About, But Awfis Leads Coworking Space

Our analysis of the P&L statements of Awfis, Innov8, and 91springboard revealed that all three companies are operating under losses. However, based on the overall analysis, we can say Awfis is emerging as the top contender in the Indian coworking industry.

The company has been able to cut its losses as well. In FY17 it registered a 227% increase in its losses over FY16, much less than the 5141% rise it saw in its losses in FY16 over FY15.

For Innov8, FY17 losses increased by 15660%, depicting that the company is still in the growth phase and needs to find ways of generating more revenues and curbing its expenses at the same time.

91springboard, although in the game for six years now, is facing stiff competition from new players in the space. In FY17, the company registered a 762% growth in losses amounting to INR 10.09 Cr, compared to INR 1.17 Cr in FY16.

Thus, Innov8 has a long way to go while Awfis and 91springboard are competing neck and neck.

Apart from numbers, the good news is that the coworking revolution is only getting stronger in India, riding on the back of its “community” and networking edge, and is far from saturation.

According to a study by real estate consultancy Jones Lang LaSalle (JLL) and shared workspaces provider WeWork, the coworking industry in India will likely attract more than $400 Mn investments by 2018.

The report further said that the potential number of seats in the coworking industry stands at 12-16 Mn, of which the biggest proportion — 10.3 Mn — is attributed to large companies, 1.5 Mn to SMEs, and another 1.5 Mn to freelancers. Startups, surprisingly — form the smallest of the lot — at 100K seats.

And as the author of the book ‘Comeback America’ David Walker aptly said, “Coworking space is a container, it holds this potential energy, and all participants create energy together, a community manager needs to facilitate this energy.”

Well, coworking spaces such as Awfis, 91springboard, WeWork, Innov8, and Instaoffice, among others, are right on track here!

[This is part of the What The Financials (WTF) series of Inc42 Datalabs, in which we explore the financial health of startups and discuss their key metrics of growth. The data has been taken from MCA filings. To read more articles click here.]

Read the Full Article Here

قالب وردپرس

Leave a Reply