Co-working firm Awfis eyes aggressive expansion after fund infusion

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With a war chest of $20 million raised from Sequoia Capital and a family fund run by Yes Bank founder Rana Kapoor’s daughters, home-grown co-working operator Awfis is planning to expand aggressively in the next one year taking its total capacity to around 40,000 seats, 60 per cent more than its present level of 25,000.

The company, which eyes spreading its geographical footprint to 15 cities from the present nine, may also explore the possibility of going public in the next three years when it hopes to touch a turnover Rs 12 billion. The company’s revenue in FY18 stood at Rs 1.5 billion. 

Currently, Awfis operates in 9 cities including New Delhi, Mumbai, Hyderabad, Pune, Kolkata, Noida and Gurugram, and is planning to enter into Chennai, Ahemdabad, Indore, Jaipur, Kochi and Bhubaneswar by March 2018.

"Our supply side acquisition cost is much lower than other players which give us the flexibility to grow faster than them. Currently, apart from the straight leasing of space, we are partnering with the landlords where we don't have to incur any fixed cost," said Amit Ramani, Founder & CEO of Awfis.

"With decent EBIDTA margin and a pedigree of profit for three years, IPO is definitely an option and we will certainly look at it as an opportunity in next 3-4 years," he added. The co-working operator, which claims to be already operational profitable, is hopeful of posting an entity-level profit in October this year.

The country has seen a number of entrants in co-working space in recent years, including companies such as Regus, 91springboard, InstaOffice, Innov8 and CoWork India. Global shared workspace provider, WeWork which has a presence in 15 countries, has also started operating in India in a tie-up with Bengaluru-based real estate developer, Embassy Group.

According to a report by real estate consultancy firm Colliers International, co-working operators absorbed seven per cent of total office space transactions in the first half of this calendar year, which stood at 24 million square feet.

Apart from partnering with property owners, Awfis is also leasing space in malls to meet the growing requirement. It operates around 30,000 square feet office space in Ambience mall at Gurugram. It has also opened centres in Raghuleela and Heera Panna mall in Mumbai and Nucleus mall in Pune.

"80 per cent of our customer base comes from corporates and SMEs while the rest comes from startups," Ramani said. 

Established in 2015, Awfis has so far raised $50 million in venture funding in multiple rounds. In the last round raised in April this year, the co-working operator raised $20 million from its existing investors Sequoia Capital, The Three Sisters: Institutional Office (TTS:IO) led by Radha Kapoor, and Temasek Group company InnoVen Capital.

"With the current round of fund raising, we are sufficiently capitalised till March of next year. Post this period, we will take a call," Ramani added. 

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