Sequoia goes solo in India’s largest funding for co-working spaces, heralds a shakedown

Photo credit: Pexels.

There were just about a handful of co-working spaces in India when Awfis started two years ago. Now, there are about 140.

Awfis started in April 2015 by offering an 80-seater space in India’s capital city Delhi to small companies, entrepreneurs, and others looking for communal office space on short-term commitments. It now has 21 co-working hubs across eight Indian cities with a combined seating capacity of 7,500. In another two years, Awfis wants to up that number to 100 hubs with 35,000 seats.

The scaling up is among several reasons why Sequoia India is betting US$20 million on Awfis in a series A round of capital infusion into the booming co-working spaces business.

This is the biggest funding round in the space in India, and Sequoia is going solo with it. The round is even bigger than all of the capital raised by the top 10 highest funded co-working startups in India – combined.

Y Combinator, 500 Startups, Blume Ventures, Anthill Ventures, and even Facebook have already backed other Indian companies in the space like Innov8, BHive, 91Springboard, and MyHQ. The investment into Awfis marks Sequoia India’s entry into it.

“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 more exciting,” comments Abhay Pandey, managing director with Sequoia India, in a funding announcement.

The differentiation

An Awfis hub. Photo credit: Awfis.

Awfis was founded by Amit Ramani, an architect with a masters in real estate and workplace strategy from Cornell University. He has been running architecture, design, and consulting services firm Nelson in India for the last nine years, and that gave him insights into the industry.

He pooled in his savings to start Awfis with the backing of a family office run by three sisters – Radha, Raakhe, and Roshini Kapoor – called The Three Sisters: Institutional Office (TTS:IO). Awfis had an initial capital of about US$11 million, the largest for any co-working space in India so far.

Amit foresaw the change coming in the demand ecosystem in India. “A demand for spaces people can use on a just-in-time basis would certainly get created,” he anticipated by putting three factors together:

• the growth in the small- and medium-sized enterprises (SME) sector
• the startup boom
• the corporates looking at reducing costs from a capital expenditure point-of-view

“While the majority of co-working spaces have focused on the startup ecosystem as their mainstay, from day one, we aimed to convert the conventional office user – those who would take up a traditional office – into an Awfis user. As a result, today our community consists of SMEs, startups, and corporates,” Amit tells Tech in Asia.

‘Manchise’ and other business models

Seat maps, anyone?

There will be blood