While the rampaging pandemic has pushed all of us in the confines of our home, which has emerged as the “new workspace”, co-working spaces still believe that their business will gain momentum once the situation normalises as companies will resort to reducing the spaces they own and operate. The repercussion is also slated to be felt in Tier-II cities and Tier-III cities which the Starthub Nation aims to capitalise.
Param Kalra, one of the co-founders of the startup was running an IT service business which was set up in a shared office in Chandigarh along with the other co-founders- Ravish Jamwal, Jaswinder Singh and Simranjeet Singh. It became difficult for them to continue running their business since the landlord started creating problems and doubled the rent. This is when the four of them conceived an idea of a coworking space business.
The nascent stage
Starthub Nation was founded in 2014 and it started with a 90-seater coworking space. Within six years, the startup has scaled up to four centres with 450-seating facilities. It has provided its services to more than 100 clients within six years. It first opened up its centres in Mohali and Chandigarh.
The business model
The company’s revenue model works on a monthly subscription-based service which is paid against the rental of the real estate and virtual offices. Their knowledge event network is composed of 400-plus entrepreneurs, mentor network and investor support which injects value to the business base.
The startup follows a very simplistic hospitality arrangement. It comes with a mobile API which acts as a virtual community with messaging and stories feature. The application helps in booking conference rooms and common spaces as well.
It also provides its clients with a feature that would allow the co-workers to work from any space and accordingly, they can make bookings from the application. It also comes with a virtual help desk that enlists all features and facilities that Starthub Nation provides its members.
The market scenario and the edge
Right now, several coworking market players are cash-rich and well funded. As per a survey conducted by GCUC (Global Coworking Unconference Conference), there were close to 2 million coworking members around the globe in 2017 and is slated to reach the 5-million mark by the end of 2022.
Established players like WeWork, 99Springboard, CoWrks and Awfis are now eyeing at Tier-II and Tier-III cities which is an unexplored but prospective frontier. Even local startups such as Next57 and WorkStudio have pooled in their bets. Starthub claims that it reserves an edge which makes it different from the other companies.
Starthub claims that it mostly focuses on the concept of a community and building up a network rather than aiming at real estate gains. To them, hospitality is and always will be the prime priority. It provides attractive offers, incentives and opportunities to its members and entrepreneurs who are a part of the Starthub’s community.
The startup earns a profit margin of 30 per cent on an average, owing to the business being capital-heavy and expenditure-rich. However, knowledge events and investment consultancy bridge the revenue gap. It also earns a unit profit of INR 2,500 per workstation, which is a "more-than-ideal" figure.
Initially, Starthub Nation was bootstrapped and borrowed money from personal acquaintances and financial institutions. They self-funded the first two centres, and along the line, they have opened two other centres.
It is now raising capital and branding funds from a Ludhiana-based angel investor and it is coming up with a 15,000 sq. ft., 600-seater co-working space in Mohali shortly.
Going forward, the founders aim to establish their footprint across all major cities in India and raise funds accordingly. Right now, its main focus will be to facilitate startups from Punjab, Haryana, Himachal Pradesh and Chandigarh and compete with the bigger ecosystems in cities such as Bengaluru or Delhi. It aims to enable 1,000 startups within the end of the next five years.