The non-IT and IT services account for 54% of Smartworks' business

For Smartworks, the non-IT and IT services already account for 54% of their business. This is far higher than the broader real estate market, where they account for 40% of the inventor

Smartworks, the country’s largest player in the B2B flexible working space, is seeing a change in its client base, wherein the  domination of IT and IT services companies has declined and  the share of other industry segments, such as manufacturing, consultancy, pharma and healthcare, and even media and entertainment players, has gone up. .

For Smartworks, the non-IT and IT services already account for 54 per cent of their business. This is far higher than the broader real estate market, where they account for 40 per cent of the inventory across markets.

The offices of manufacturing companies, especially those of global automobile players which have entered India, now account for 12 per cent of Smartworks’ space capacity. And it includes companies like MAN Trucks & Buses, Bridgestone and Schaeffler India, amongst others. Starbucks and Dassault Corporation are also housed in their campuses.

Pharma and healthcare companies like Teva Pharma account for 4 per cent of the space and consulting and finance companies like E&Y and  Grant Thorton another 12 per cent. Even media and entertainment companies like NDTV are part of the Smartworks clientele. This sector accounts for 6 per cent of the space. The other big chunk is occupied by the banking, financial services and insurance (BFSI) sector, which accounts for 7 per cent of the space.  

Says Smartworks founder Neetish Sarda: “When we began, we thought that IT and IT services would dominate. But now every segment of business sees value in what we offer, the flexibility they get and the cost savings. Also, the new generation is exposed to what the best offices in the world look like and they aspire to the same in India and want their workspaces to be a more engaging place.”

Smartworks is clearly on an overdrive. It is planning to nearly double its work space from 7.5 million sq ft in FY23 in 14 cities by the end of this financial year. Moreover, it is now building campuses with average sizes of 500,000 sq ft. It already has the world’s largest campus in Bangalore, with an office space capacity of 700,000 sq ft, and has 500 companies as its clients. As many as 40 per cent of its clients are associated with it across cities, which is a key advantage of flexible and managed office space.   

Unlike its competitors, Smartworks has been bootstrapped by its promoters and raised $25 million in 2019 from Keppel Land Ltd in a series A fund raise. However, it is planning to raise another $70-80 million this year to fund its hectic pace of growth and the plan to hit 30 million sq ft in four years.

Sarda says that unlike other startups, Smartworks has always generated profits, garnering revenues of Rs 700 crore in FY23. The aim, he says, is to achieve Rs 1,000 crore of revenues in FY24. That is why it is not focusing on valuation, Sarda adds.   

The company has also built office capacity in smaller cities like Indore and Jaipur, as many companies want a more geographically dispersed workforce after the pandemic. Sarda says it’s a win-win for the companies. Compared to Tier 1 cities, the cost of living in smaller cities is 15-20 per cent lower and the cost of a seat too is around 35 per cent less. In Tier 1 cities, the cost per seat is Rs 9,000.

-The average size of a Smartworks campus is 500,000 square feet, with the capacity for 8,000-9,000 seats.

-It has built the world’s largest flexible work campus —  700,000 sq ft in Bangalore.

-Currently, it has a total inventory of 160,000 seats.

-The total flexible workspace inventory in India is 35 million sq ft

-85-90 per cent of it is in the hands of five players, down from around 400 players when co-working space started out in India