India is leading the growth of flexible office spaces across Asia-Pacific.
Recently, Hyderabad-based Anthill Ventures announced a $100 million fund for Israeli startups. Sensing a warm reception in the investment space, Israeli startups are rapidly venturing into the Indian market and are finding low-cost workspaces in co-working. Oncehub, an Israel-based technology venture, recently set foot in India with GoWork (a co-working facility in Gurgaon) to test the waters. Similarly, Swedish watch company Daniel Wellington entered India by occupying space in WeWork, Bandra Kurla Complex (BKC), Mumbai, to focus on expansion strategies with the help of cost-efficient solutions.
As per a recent CBRE South Asia report, India is leading the growth of flexible office spaces across Asia-Pacific (Apac) while several multinational and Apac-based companies have expressed their interest in the Indian market. The average rent of an office space in India’s prime locations ranges between `100 per square feet (sq ft) and `250 per sq ft along with the additional costs of setting up and maintenance.
Co-working spaces such as GoWork are addressing both long-term and short-term requirements of foreign businesses, as well as providing a business collaborative atmosphere, community and varied amenities like gym, spa, sleeping pods, Netflix rooms, bar, live kitchen, creche facility, frustration zones, etc. Co-working spaces also offer tenures of less than one year, whereas any regular commercial lease asks for a minimum lock-in period of five years.
Sudeep Singh, chief evangelist and CEO of GoWork, says: “We started GoWork with an idea of empowering startups with networking, mentoring, and opportunities for investor pitching sessions. Today, we are enabling startups to save up to 30% in rental costs. Furthermore, startups are saved from the hassles of spending on fundamental allied services such as the internet, phone communication, conference rooms, etc., as such services are already built-in and are of high quality.”
Players such as GoWork, WeWork, Smartworks, AWFIS, etc., are empowering the new entrants to save 15-30% of costs while optimising their operations in a new market, while also enabling them to upsize and downsize their business. These foreign businesses get to save on expenses such as electricity, water, administrative costs, and internet charges. Additionally, these space providers are providing customised services to their foreign occupiers along with financial, legal and logistic support.
According to Singh, India holds the potential for growth across various startup sectors. It has the second largest number of internet users after China and largest number of users of WhatsApp and Truecaller. Seeing the possibilities, international companies are eyeing Indian markets for business growth. “This is very similar to the trend observed during my time in Silicon Valley, where startups come from all across the globe in search of growth and new business prospects,” he adds.
Singh says this trend of international business entering India will grow on a constant basis, approximately at a growth rate of 74% year-on-year.
“India is emerging as a hot market for international startups as well as investors from across the globe. The key drivers that will continue to build this further are cheaper manpower and good talent available in India and the opportunity for increased trade avenues,” he added.