The Co-working Industry in India: A Post-Pandemic Miracle or Another Disaster?

The Co-working Industry in India: A Post-Pandemic Miracle or Another Disaster?

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The co-working industry in India started to pan out in the early 2010s when startups were getting started and VC funds had just found their way to the Indian markets. But despite the early adoption and the gradually increasing demand, the co-working industry never found traction in India. 

Dwindling capital, high competition, no profits, and a capital-intensive expansion strategy wasn’t a sustainable approach and this was evident from the balance sheets of the major players in the market. When the pandemic hit in early 2022, employees were sent home and small businesses left too as they didn’t have enough funds to pay for empty offices. 

Amit Ramani, the Founder & CEO of Awfis, reported a significant drop in business, with the majority of the company’s revenue (55%) coming from smaller customers who had leased less than 100 seats. Here’s what he had to say about the impact of covid on the business:

 “The smaller customers left and that obviously impacted us as our revenue dropped significantly

However, the post-pandemic recovery seems phenomenal. The demand is more than ever before, companies are scaling at an unprecedented rate and international players like WeWork have entered the market. 

But is that necessarily a good sign?

We have reasons to believe otherwise and that’s what we’re here to share with you. It’s not all rainbows and sunshine. The objective of this blog is to give your a new perspective towards the industry and familiarize you with some lesser-known facts that offer you the full story instead of the fairy tale being sold out there.

The Pandemic: A Miracle in Disguise for the Co-Working Industry in India

According to JLL Research, prior to the pandemic in late 2019, the flexible office spaces market spanned over 30 million sq. ft and 471,782 seats across India’s top seven markets. By late 2020, this number had plunged to 20 million sq. ft and 312,990 seats. However, the co-working industry has made an impressive recovery since then. 

As of June 2022, co-working spaces in the top seven cities grew by 117%, reaching almost 43.4 million sq. ft with over 679,760 seats. By the end of 2022, JLL estimates that the numbers will continue to increase to 50 million sq. ft and 750,000 seats. Within the next three years, the co-working industry is projected to surpass the 1-million-seats milestone, with a total of 1,030,000 seats across the top seven markets and an area of 75 million sq. ft.

If we are to believe the JLL report, the co-working sector in India is expected to cross 50 million sq. feet by the end of 2023. 

After the second covid wave started to recede in mid-2021, employees gradually started to move to offices with Hybrid work mode and the co-working companies were back in town. And as employers started calling their employees back, the demand was surging. And there were two reasons for this:

  • Covid highlighted the uncertainties around work, so companies started investing in flexible co-working spaces instead of long-term leases and dedicated office space.
  • With a fund crunch across non-IT verticals, flexible co-working places were the only viable option.

As the prospect of co-working spaces now became more practical than ever, all companies small and big started flocking towards these new-age corporate hives and the demand was substantially higher than it had ever been and the result was a rapid expansion in co-working space across all major cities.

Irfan Razack, Chairman & MD of Prestige Group says 

“It’s a win-win situation. Companies prefer spending a little more for a shorter-term contract with co-working space providers and saving themselves from investing in infrastructure. On the other hand, this is [boosting] the flex workspace market and, today, there are many more successful players than a few years ago. Post-Covid, co-working spaces are the way forward [for the commercial real estate market]

According to a report from real estate research firm Cushman and Wakefield, the co-working industry in India aggressively expanded its portfolio in the latter half of 2021, adding 4.91 million sq ft of space, a 21% increase from the previous year. This significant growth has paved the way for a strong foundation for further expansion in 2022.

Another research by JLL reveals that the flexible office spaces market in the top seven markets of India encompassed approximately 30 million sq. ft and had 471,782 seats in end-2019, just prior to the pandemic. However, by the end of 2020, these figures declined sharply to around 20 million sq. ft and 312,990 seats. 

Nevertheless, the sector has demonstrated remarkable progress since then. As of June 2022, the co-working spaces market in the top seven cities had grown by an astounding 117%, reaching almost 43.4 million sq. ft and comprising over 679,760 seats. 

The Top Players in the Co-Working Industry

As the co-working space industry is gaining traction, more and more players are emerging and the competition is getting tougher. However, here are the top 5 players in the market that are currently ruling the landscape:


Founded in: 2012
Founder(s): Anand Vemuri, Anuj Pulstya, Deepak Sharma, Pranay Gupta
Location: Delhi
Number of Employees: 251-500

If you’re a startup or small to large company looking for flexible and affordable office solutions, consider 91springboard. They offer part-time office space with 24×7 infrastructure support and access to key service providers. Plus, there are opportunities for knowledge sharing, collaboration, and networking to help grow your business.


Founded in: 2017
Founder(s): Karan Virwani
Location: Bengaluru
Number of Employees: 101-250

WeWork is one of the major players in the Indian flexible workspace market. It specailises in commercial real estate, especially in flexible workspaces for startups, and other medium to large-sized businesses. The company is the subsidiary of the commercial real-estate behemoth WeWork based in New York, United States.


Founded in: 2016
Founder(s): Utkarsh Kawatra, Vinayak Agarwal
Location: Delhi
Number of Employees: 1-10

This company provides a unique coworking space experience, with over 300 locations available in Delhi, Gurgaon, Noida, Bangalore, and Mumbai. A flexible plan is available, allowing you to work from any myHQ space with a single pass, including coworking spaces and work cafes.


Founded in: 2015
Founder(s): Amit Ramani
Location: New Delhi
Number of Employees: 51-100

Awfis offers more than just a coworking space, with offices located in major cities including Mumbai, Hyderabad, Pune, Delhi, Gurugram, Kolkata, Noida, and Bangalore. Their coworking ecosystem provides the infrastructure and aesthetics needed to help you power through a busy workday.


Founded in: 2015
Founder(s): Dr Ritesh Malik, Shailesh Gupta, Sumit Ranka
Location: New Delhi
Number of Employees: 11-50

Innov8-Coworking, a Y-Combinator backed startup, offers premium workspaces including private offices and coworking spaces across India. Their centres are thought spaces that foster community engagement among like-minded individuals, regardless of their backgrounds. With locations in Delhi, Noida, Gurgaon, Mumbai, Bangalore, and Chandigarh, Innov8 provides a highly productive environment for founders, investors, freelancers, creators, and anyone looking for a top-notch workspace.

The Popularity of Co-Working Spaces in Tier-II Cities

Tier II cities have become the new hot spot for coworking spaces in India as companies optimise to save costs and build a more sustainable business model. It is also a smart step with regard to acquiring and retaining top talent, as these cities have a lower cost of living and a big talent pool, offer a candidate a role in his/her home town and they will be more than willing to accept the offer even with a lower pay-scale.

People today are smarter when choosing locations to work from because accommodations in Tier-I cities are unreasonably expensive and eat away at a major chunk of an individual’s income. Meanwhile, an opportunity to work from one’s hometown seems instantly more attractive because:

  1. Saves accommodation costs entirely
  2. Gives them the comfort of being with their family while building a career.

Moreover, Tier II markets are expected to experience a significant increase in hybrid workplaces, driven by factors such as reverse migration, cost of living, and infrastructure development by governments. This has prompted flexible workspace providers to expand their services, resulting in direct and indirect contributions to the growth of commercial real estate and coworking spaces.

Advantages of Co-Working Spaces over Traditional Offices

Flexible co-working space offers multiple advantages over conventional dedicated office space. Listed below are the most important ones:

  1. Flexible co-working spaces are startup-friendly. Startups operate on a limited budget and they don’t fancy a dedicated office because they don’t have the financial bandwidth to do so. 
  2. A co-working space offers state-of-the-art facilities like high-speed internet, printers, scanners, chilling spaces, smoking rooms, meeting spaces, convenient locations, and flexible payment plans at a more affordable price.
  3. Co-working spaces are popular avenues for networking and idea-sharing. People such as investors, startup founders, and established businesspersons actively use this space for brainstorming. These co-working spaces are seen as great opportunities for new entrepreneurs to network, learn and grow their businesses.
  4. Top metro cities in India offer co-working spaces for all needs, with leading industry brands providing reasonable options for individuals and businesses, from single seats to large requirements. 
  5. Flex workspace agreements offer more flexibility compared to traditional office leasing models, as they allow firms to have shorter lock-in periods, providing them with greater scope for reconciliation in the near future.

Co-Working Space and SMEs

Coworking spaces, once popular among startups and freelancers, have now become a prerequisite for Small and Medium Enterprises (SMEs). Of the total 12-16 million potential seats, large companies account for the largest chunk of 10.3 million seats, while freelancers and SMEs have an equal divide of 1.5 million each.

India has over 63 million SMEs, growing at an average rate of 10%, contributing to 45% of its manufacturing output and over 28% of its GDP. The current MSME employee base of 128 million was projected to grow to 170 million by 2022. With the government’s renewed economic reforms, including streamlining labour laws, ensuring digital integration, and creating SME/MSME-friendly policies, the business ecosystem in India cannot overlook the SME segment.

The Co-Working Sector: A Race to the Bottom

The statistics sure support the flexible working space industry in India, we don’t entirely share this view. There have been some events in the past and some discoveries of our own that have led us to believe so. Let’s dissect them one at a time.

The WeWork Failure

WeWork, arguably one of the biggest commercial real estate companies in the world went from an astronomical market cap of $43 billion to a measly $300 million, and all of this happened while the co-working area under its management increased manifold. 

The initial hype around the company was well-designed with slogans like “leading the Co-working revolution” and “future of workspace”, the company convinced enough people to hop on the hype bandwagon and give the company its inflated valuation.

The interesting part about the hype story was that the company itself believed in it and soon decided to go for an IPO. And boy did it rain down on them. You see, for a company to be listed in the US, it has to file for what is called an S-1 filing with the SEC, and that involves opening the books to them. 

The fairy tale ended the moment they decided to disclose their company fundamentals to the public. Piling losses, relentless cash burn, and zero profits. Would you be willing to invest in such a company?

Any reasonable person would say no and looks like there were indeed a lot of reasonable people at the time because the stock tanked more than 97% in two years. 

In 2019, WeWork was valued at $47 billion, resulting in a price-to-sales ratio of 13.6 times, while IWG’s (a competitor) price-to-sales ratio was 0.8 times. This made it clear that WeWork was overvalued compared to IWG, despite having better management, a better track record, more office space, and more diversification.

The company eventually got listed on the New York Stock Exchange in October 2021, two years after its failed IPO, through a SPAC. At listing, its market cap was $8.2 billion, which was significantly lower than its $47 billion valuation in 2019.

Since its, its share price has fallen from $11.78 to $0.44, resulting in a 97% loss. Its market cap has plummeted to $1.3 billion, a 97% drop from its peak of $47 billion, reflecting its consistent losses.

Why was the company Piling Losses?

A huge company with billions of dollars worth of real estate at its disposal isn’t the kind of company you would expect to be making such monumental losses, but it did. The problem lies deep in their own expansion strategies.

The commercial co-working market is a competitive one. WeWork decided to establish a monopoly in the market, but they needed cash for that. Billions of dollars. So they stitched a story, a dream called the co-working revolution. One that was fed to investors for pooling in the cash they needed to expand aggressively.

To establish a monopoly in a certain sector, you need a price, or some other feature that offers a clear competitive advantage and the supply or inventory to meet the demands arising from that. 

WeWork offered their workspaces at a competitive price and burnt billions of dollars to expand the area under their management. But they were making no money, and they were essentially a cash sink and since the market was competitive, the prices were bound to go lower. It was a downward spiral from there. A race to the bottom.

Does that mean WeWork will Shut its Store?

It sure is a possibility, but it seems highly unlikely because the company might have had a broken expansion strategy, but it did invest in one of the best capital assets out there, real estate. And when you have billions of dollars worth of physical assets backing your business. Capital is never a problem. 

What’s Next for the Co-Working Industry in India?

The co-working sector in India is facing the same challenges as WeWork did back in 2016. High competition, intense capital requirements, and a downward spiral of prices per seat offered at these commercial spaces.

Most leading co-working businesses in India are either pre-revenue or have just turned profitable in the backdrop of the post-pandemic boom in the sector. Which is obviously a positive sign. But how long can you compete in a market where you have intensive capital requirements and are compelled to lower your prices just to stay in the market?

We’re not saying that businesses in the sector are doomed to fail, but Cash burn is a huge problem in this sector, and unless these businesses figure out a smart way to handle their capital requirements, survival is going to be difficult. 

Liked this blog, and I am sure you will enjoy reading: Myopia In Marketing



  • Kunal Mishra

    I am a creative content writer for Promotedigitally and I also work as a Freelance content writer. You can connect with me on LinkedIn through this link: www.linkedin.com/in/kunalmishracontent

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