Startup is the buzzword in most cities today. While many startups are born out of Tier I cities such as Bengaluru, Delhi, and Mumbai, Tier II cities such as Patna, Indore, Chandigarh, and Kochi are not left far behind.
Recently, during his address, Prime Minister Narendra Modi said over 44 percent of startups are now from Tier II and III cities, and these are spread across 419 districts of the country.
And yet, one of the challenges these startups face is having a reliable working yet affordable working space. While there are the likes of WeWork, Cowrk, Innov8, and CoLive in the metros catering to the segment, smaller towns and cities seem to have a lack of quality coworking spaces.
Spotting the gap in the market, Alok Kumar (26), Prakhyat Kashyap (25), Rahul Samrat (27), Ishan Paul (29), and Sonu Sourav (29) started Work Studio Coworking in Patna in April 2018.
The startup not only claims to provide ‘cool’ infrastructure, but also a collaborative community to let businesses grow together.
“Employees spend an integral part of their lives at work and they expect a good office with people from diverse backgrounds to share their learning, and of course, find better opportunities,” says Alok.
In just a year of its launch, the team claims to have broken even and is profitable with a turnover of Rs 2 crore.
Learnings from failure
According to the founders, who have a background in BTech and BCom, the road to building Work Studio came from their failure.
“We all had our own startups, but all of them failed one by one,” says Alok.
Not knowing their next course of action, all of them started attending different events and meetings, looking for opportunities. It is during this time the five of them met at a startup event in Patna in 2017.
“We all realised that while our city (Patna) had high-paying jobs to offer, startups, and even events, we didn’t have a proper workspace,” says Alok.
It was during the same time that startups from Bengaluru, Mumbai, and Delhi were coming under the spotlight. Armed with their previous experience of starting up, they decided to launch Work Studio.
Apart from the five co-founders, Work Studio’s today has 15 members in its team.
While the concept of coworking has been there in metros for a few years now, it is relatively a new concept in Tier II and Tier III cities of India.
“Most startups here tend to take a room on rent and work,” Alok says. So, the team started conducting meetups, events, and collaborations to spread the word.
After establishing a firm ground, Work Studio ventured out into the market with its first coworking space in Patna, Bihar. Subsequently, they started two in Ranchi, one in Gurugram, and has another one coming up in Indore.
“Having a coworking space in Tier II and Tier III cities will not only have the potential to initiate reverse migration, but also has the potential to create a vibrant ecosystem of entrepreneurs, and eventually increase the State’s economy,” Alok says.
Revenue and funding
Apart from providing facilities and services, Work Studio says it gives importance to affordability. The coworking space leases the building from real estate owners and builders, and in turn gives it out to startups.
“We have developed properties by raising funds for the units and getting into a partnership model with property owners,” says Alok.
Currently bootstrapped, the founders initially each pooled in Rs 50,000 from their personal savings to invest in the startup.
The startup currently offers 500 seats across its four spaces. It offers seats under different categories – open desks, dedicated desks, private chambers, and virtual offices. The seats range between Rs 3,500 (for budget coworking) and Rs 5, 500 (for dedicated seats per month.
In addition to providing low cost workspaces for startups, Work Studio also allows the flexibility for teams to grow as and when required. Similarly, all their spaces are centrally located.
At present, some of its prominent clients include startups such as Zomato, Swiggy, PhonePe, Car24, Udaan, DeHaat, Cloudtail, and a few MSMEs and freelancers.
“We just have five seats left in our recent six-month-old unit,” Alok says.
The coworking space market in India has been disrupting the traditional work environment today. As per GCUC (Global Co-working Unconference Conference), there were a total of around 1.7 million coworking members around the globe in 2017, which is expected to touch the five-million mark by 2022.
Banking on the trend, recently, New-Delhi based Awfis raised $30 million in Series D and Gurugram-based GoWork raised $53 million in debt. Additionally, unicorn hospitality chain OYO acquired Innov8 to start its own coworking space.
Some of the major players in the space in India like WeWork, CoWrks, 99Springboard, and Awfis are all believed to enter the Tier II and Tier III cities soon.
However, what makes Work Studio stand out is its target audience.
“We are aiming to develop coworking spaces in Tier II and Tier III cities,” Alok says. They believe the requirements of office spaces is different for Tier II and III cities. Chandigarh-based co-working space Next57 is also working to solve this problem.
After seeing Rs 2 crore turnover in just a year of its launch, the startup is now actively looking to raise funds.
“We are looking for funding to set our targets much bigger and achieve them before time,” Alok says.
However, he says, they have “plans to hit 25 coworking spaces by the end of 2020, irrespective of funding.”
(Edited by Megha Reddy)