Awfis gets $20 million from Sequoia
Call it the WeWork effect, Indian venture capital firms are warming up to the nascent shared work place market locally. Sequoia Capital is putting $20 million or around Rs 130 crore in Awfis, a network of collaborative co-working spaces, which wants to establish 100 centres within a ten minute driving distance of each other across metros. This is the largest financing round for any player in the segment and also the most significant early-stage bet by a risk investor on a domestic startup in this segment.
Awfis was jointly incubated by its founder Amit Ramani and The Three Sisters: Institutional office, a family office led the three daughters of Yes Bank’s Rana Kapoor, with a total corpus of $11 million.
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The funding round comes on the back of WeWork, the New York-based shared work place startup, which is valued at $17 billion having already mapped out its India plan by forging a joint venture with the Bengaluru-based developer Embassy Group.
Awfis which has about 7,500 seats across 21 centres across eight cities is looking to expand to 35,000 seats over the next two years. “No one sits at their desks and gets their work done. Today’s workforce is mobile and we want to cater to this set of growing professionals in the country with a shared economy platform like ours,” Ramani told TOI over a chat. The two-year-old company, uses a combination of managed franchise model and leasing properties to open its centres. Unlike WeWork which takes up huge spaces, Awfis says it differentiates itself by being a 350-400 seater, neighbourhood co-working centre.
Ramani said Awfis was pushing its just-in-time usage which costs Rs 350 for a seat on a per day basis as it’s far more lucrative than clients which take up monthly and annual packages. Office rental startups are gaining traction especially among small to medium enterprises (SMEs) which do not want to lease offices at high rentals. Awfis has 50% of its users come from the SME sector, 25% are freelancers and startups, while the rest are corporates. Abhay Pandey, MD at Sequoia Capital, said Awfis is playing on two significant global trends– sharing economy and communities. This being delivered through a superior user experience at a lower total cost makes it exciting.
WeWork which had announced its India entry and is expected to start operations soon has disrupted the traditional real-estate sector across the globe. The company recently leased 1.9 lakh sq ft space at the Enam Building in Bandra Kurla Complex (BKC). Bhive , 91 Springboard, Investopad, Breathing Room, Innov8 are some of the local startups offering co-working spaces in India while Bengaluru-based RMZ Corp is also foraying into this business.