Funding News

Co-working startup GoWork secures $53 Mn Debt funding from BlackRock

BlackRock, the world’s largest asset management company, has staged a comeback after a long time with $53 Mn (nearly Rs 375 crore) debt investment in co-working startup GoWork. The New York headquartered investment giant made the investment proceedings through a private fund. The financing will be done for over the period of two years or 24 months.

Gurgaon based GoWork raised $53 Mn debt investment from asset management firm BlackRock

CLSA Capital partners, another well-known investment platform, also invested in the debt round.

GoWork is taking the brick and mortar aspect of the co-working concept further, as well as consistent measures to enable young businesses to reach their highest potential,” Neeraj Seth, BlackRock’s  Head of Asian Credit, said in a statement.  “We look forward to GoWork offering optimal operational efficiency for all start-ups as well as corporates.”

For BlackRock, this is only its second investment in India’s burgeoning startup ecosystem. The investment behemoth’s first major investment was in Snapdeal way back in 2014. Its maiden investment turned out to be a dud as Snapdeal’s fortunes went southwards due to increasing competition from Amazon and Flipkart. Since then BlackRock has almost kept the Indian startup ecosystem at arm’s length.

As for GoWork, securing investment from the world’s most reputable investment firm will come as major boost; especially because the Gurgaon headquartered startup is still vying for a pan India presence. It is currently present only in two locations in Gurgaon with inventory space of nearly 12,000 seats.

Is India’s Co-working Industry the new Sunrise industry?

With the mainstream corporate world lapping up co-working space in a big way, India’s co-working industry is witnessing a renaissance period. According to recently released data, big and small corporate firms own 40-45% space in the co-working industry as opposed to only 15-20% owned by startups and freelancers.

Corporates, SMEs and start-ups’ change of perception and smooth transition towards co-working space is offering good revenue stream to the co-working companies. What goes in the favor of co-working space are factors like convenience, ease of setting up office, and several favorable amenities, which are not usually offered by traditional office space.

As per real estate advisory firm CBRE, India’s flexible workspace witnessed a massive jump of 277- in leasing to clock nearly three million sqft in the first quarter of the calendar year 2019. If industry estimates are to be believed then India’s co-working industry is currently worth nearly $ 390 -400 Mn.

Budget hotel major Oyo’s acquisition of Gurgaon based co-working startup innov8 earlier this year for Rs 220 Cr is yet another strong signal that co-working space Industry is on the rise. Oyo’s aggressive growth strategy for innov8 only re-affirms this fact further.

91Springboard, Awfis, GoHive and global co-working giant WeWork are the major competitors in the industry.

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