Innov8, the Gurugram-based coworking startup, has raised $4 Mn in a pre-Series A round of funding led by Credence Family Office. Existing investors also participated in the funding round.
Founded in 2015 by Ritesh Malik, Innov8 counts LetsVenture and Y Combinator as its early backers. It currently has 13 coworking spaces in the National Capital Region (NCR), Mumbai, Bengaluru, and Chandigarh.
It also boasts a wide network of 190 clients, including well-known names such as Vice Media, Ratnakar Bank Limited (RBL Bank), and Swiggy.
Ritesh Malik, Founder and CEO of Innov8, said, “We have almost 95% occupancy across all our centres, which is one of the foremost markers of our success. With the domain expertise our investors bring on-board, we look forward to leveraging their support, as we build a leading platform offering collaborative space for growth and innovation in India.”
How Innov8 Plans to Utilise The Fresh Funds
Innov8 will utilise the capital to expand its footprint beyond Delhi NCR, Mumbai, Bengaluru, and Chandigarh. It will further double its seat count to 8,000 in the next six months.
The startup will further use the funds to make additional investments in building technology platforms for its businesses, enabling solutions and customer-facing apps, improving the community experience, and raising the company’s net promoter score (NPS).
Innov8’s biggest competitors are Awfis and 91springboard. In August 2018, Inc42 DataLabs observed during a financial analysis of the FY17 P&L statements of Awfis, Innov8, and 91springboard that all three companies are operating under losses.
However, for Innov8, FY17 losses increased by 15660%, showing 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.
But as Gaurav Gulati, COO of Innov8, said, “In a capital-intensive business such as ours, we have been able to clock promising growth while maintaining financial prudence. Our expertise lies in developing a compelling value proposition that has helped us exceed our targets.”
Growing Coworking Community In India
India has emerged as one of the world’s most preferred markets to invest in, buoyed by its thriving economy, growing startup ecosystem, and ever-widening talent pool.
As businesses, both big and small, continue to mushroom and spread their wings, ballooning real estate costs, coupled with increasing acceptance of sharing economy concepts — as opposed to ownership of office spaces — has spurred the demand for a coworking or a collaborative workspace in India.
According to Gaurav, today, collaborative workspaces, have shifted the focus to saving time and money, along with creating a community and a culture of working better together.
Mitesh Shah, co-founder and managing partner, Credence Family Office, further added, “The co-working space is an exciting segment to be present in. Innov8’s unique business model has demonstrated promising growth trajectory along with some of the leading names in the industry as its clientele.”
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.
Other notable names in this space are Cowrks, BHive, and WeWork India, among others.