Noida-headquartered shared workspace provider Smartworks has raised $25 Mn in a fresh funding round from Singapore-based real estate company Keppel Land.
Neetish Sarda, the founder of Smartworks, said that the company will now be able to scale up even more rapidly across Tier 1 and Tier 2 cities. It also plans to further invest in building up its next-generation product, improving client experiences, as well as boosting the talent and technology.
Founded in 2016 by Neetish Sarda and Harsh Binani, Smartworks is a shared workspace provider. Smartworks provides office spaces that can be rapidly configured and customised in just four to six weeks according to the needs of their enterprise clients, offering a full suite of solutions at a value price point without upfront capital expenditure.
The company claims to have 23 operational centres in nine cities offering a total of about 43,000 workstations spread over 2.3 Mn sqft. Smartworks’ average rental plan across India is about INR 10K per seat. Some of its clients include Amazon Web Services, Bacardi Limited, DHL, etc.
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Tan Swee Yiow, CEO of Keppel Land, said, “Smartworks’ innovative business model, coupled with its strong knowledge of the Indian enterprise office segment and execution abilities, is highly scalable and relevant, particularly in India’s growing market for commercial office spaces. There are also many opportunities for cross-learning and collaboration between Smartworks and Keppel Land’s smart serviced co-office platform, KLOUD.”
Over the next five years, Smartworks plans to grow its footprint to 20 Mn sqft and provide office solutions for over 200K working professionals.
Sarda said that Smartworks is already cash-flow positive and is profitable at a consolidated level. The company had generated a 10% profit margin on its INR 110 Cr revenue in the 2018-19 fiscal year. The company has assured an INR 320 Cr revenue with a profit margin of 20-30% for the 2019-20 fiscal year.
From the beginning of 2018, India observed rapid growth in the establishment and performance of flexible workspaces. Such workspaces, complemented with coworking spaces, have come up with innovative ideas, better flexibility, and engaging activities, among others, to be at the forefront of the commercial real estate sector.
The company competes with the likes of Qdesq, WeWork, Awfis, etc. As per JLL estimates, currently, there are approximately 325 to 330 flexible workspace operators in the top seven cities in India. The study finds that the average size of transactions in the co-working segment increased from 37,000 square ft in 2017 to 52,000 sq ft in 2018 and further to 97,000 sq ft in the first half of 2019.