Business centres and co-working spaces find common ground with iShareSpace
With centres in Bengaluru, Gurgaon, Mumbai and Chennai, iShareSpace provides working spaces especially suited to the needs of MNCs, part-time professionals and startups.
A chance meeting with a friend, a New York-based entrepreneur, in 2015 led Priyanka Krishnan to identify a gap in the co-working industry. Wanting to start up in India, her friend was looking for a business centre like the ones he was used to in New York. But he found the business centres in the country way too formal and the co-working spaces way too informal for his liking.
Priyanka found the middle ground in what she calls the 'new age business centre', which caters to not just startups, but also foreign companies that want to enter India, part-time professionals, as well as retired/senior executives who want to start new ventures.
Priyanka, 31, and Aayush Maheshwari, 26, quickly proceeded to establish iShareSpace in late 2015.
Unlike the typical co-working set-ups that house several startups in large open spaces, iShareSpace provides glass cabins, with designated areas for taking a break or having a snack.
Besides, the company is particular about the locales they choose. They ensure that the building is in the heart of the city, with parking space, a good lobby, convenient infrastructure, and provision of maintenance.
Since its first centre came up in Mumbai in April 2016, iShareSpace today has expanded to four centres with a seating capacity of more than 400. Importantly, 80 percent of its clients are multinationals.
iShareSpace melds unique features of both a co-working space and a business centre, toning down the informality associated with the former and doing away with the mundaneness linked with the latter. Says Priyanka,
“We found a middle space–it is an open field, but with your own space. It is not uncommon that complete strangers who meet at iShareSpace start hanging out together. Some of them end up working together too.”
Although co-working spaces often conduct events for the benefit of startups, the needs of an MNC are often different. Other than common lunches, iShareSpace is planning more events now, which will be mostly knowledge-based. These events, unlike the ones for networking with other entrepreneurs and VCs, will have experts from various fields talking about strategies and making sense of local laws, guidelines and policies for the benefit of the MNCs.
“Also, we have tied up with restaurants, cafes (near the centres),” Priyanka informs. This will allow iShareSpace customers to avail a discount at these cafes and restaurants card during the length of their lease.
iShareSpace is also open to tying up with startups, which can test their product amongst a ready audience. The team has 10 members including centre managers and general managers.
The company had a smooth start, thanks to the founders’ previous work experience. Priyanka had worked in BDO Consulting in their mergers and acquisitions team, and later with the Global Data team at Bloomberg India. She has done BCom and MSc from Manchester University, and holds an MBA degree from Imperial College, London. Ayush, a finance graduate, had worked with various organisations overseeing strategy, business relations, fundraising and growth.
The duo registered iShareSpace in November 2015 and opened their first centre in April 2016. They piloted in Mumbai with a 40-seat centre in Lower Parel.
They started with an initial investment of about $1 million raised from family, friends, and angel investors including Venu Krishnan, former MD of Leela Group, BL Maheshwari, Senior Partner of B. Maheshwari & Co., Rajiv Dube, Founder of Starwing Group, chartered accountant Mahesh Singhania, and corporate finance expert Rupinder Arora.
As they grew, operational profitability was not too distant. For this hybrid model, prices are higher too: Rs 1,000 per day, Rs 5,000 per week, and monthly charge is based on the city the centre is registered in. In comparison, typical co-working spaces charge Rs 3,000 to Rs 10,000 for a month. The average lease period is nine months with a one-month evacuation notice.
But most people who come for two-three months also mostly end up extending their lease, Priyanka notes.
She is referring to freelancers who are mostly 30-plus in age, and prefer a calmer, more private environment rather than an open space which might be distracting. Also, they tend to find people there whom they can collaborate/work with.
The firm initially reached out to potential customers through digital marketing and social media, along with cold-calling companies, Nasdaq, online portals like QDesk, Instant Offices, etc.
“This business is capital-intensive, and marketing holds great significance. It took us three months to get the first customer,” Priyanka recollects.
After these initial hiccups, iShareSpace witnessed fast growth. Their second centre, which seats over 150 people, was launched in June 2016 on Bengaluru's Residency Road and has achieved 96-percent occupancy. The third centre with a seating capacity for 100 people was launched in April 2017 in Gurgaon. Chennai's centre, which seats over 120 people, was opened at Nungamakkam, the city's business district, in June.
Although there is competition from business centres and co-working spaces, like Bhive and Innov8, iShareSpace targets a different type of audience–80 percent of their clients are multinationals, including Canada-based OpenText.
The remaining clients are medium-sized companies, startups and freelancers. Education services company Ellucian, SMEs like IMI Mobile, as well as college students, part-time workers, freelancers, former executive professionals who are venturing on their own now are also regulars.
Time has come for hybrids
With real-estate prices going up, for MNCs that want to start operations in India a concept like iShareSpace could be a better option. However, Priyanka admits to the need for more visibility.
Although iShareSpace has not raised money so far, Priyanka notes that they will be doing so soon in order to fund expansion. She adds,
“We want to have one more centre in Bengaluru, since within six months we have had full booking and are already breaking even there. We are also keen on Hyderabad, another bigger centre in Mumbai, and one in Pune.”
Differentiation is the name of the game for iShareSpace in an industry which is crowding up with co-working spaces sprouting all over the country. According to a Colliers International report, there are more than 160 players running more than 350 centres in Tier-1 and Tier-2 cities in the country.
Awfis, Bhive, 91SpringBoard, CoWrks and multinational WeWork are some of the leading players in the space today. In fact, Awfis raised $20 million in April, which was not just the highest amount invested in the sector so far but also a sign of the potential future. Delhi-based Innov8 also caters to corporates besides startups and freelancers.
Although iShareSpace can exploit the unprecedented growth of sharing economy, it will likely be slow as possibilities of expanding outside Tier-1 cities are limited for a hybrid business model like this. Besides, the current demand is a result of huge population, limited space, and high real estate prices in Tier-1 cities, which are also where most of the action is concentrated .
However, with 90 percent occupancy achieved across its centres in a year, iShareSpace seems to have found a sweet spot, and its founders are looking to dominate the space.