Info-tech

InstaOffice aims to bridge the gap in office spaces

Amrita Nair Ghaswalla Mumbai | Updated on January 12, 2018 Published on January 10, 2017

InstaOffice co-founders Vikas Lakhani and Devendra Agarwal

Merger and acquisition banker Vikas Lakhani was in a quandary. Having moved out of his cushy job at Credit Suisse in London, where he dabbled in investment banking for infrastructure and renewable energy clients, Lakhani realised he did not have an office to operate out of when he wanted to branch out on his own.

Looking to provide sell-side investment research to top-tier investment banks and indulging in strategy and business development with senior management across the globe in his new role at Copal Partners, Lakhani started scouting for a presentable office, and then realised the immense hardship start-ups and entrepreneurs have to face.

Limited space

“All the available options reflected a very limited supply of office space in Delhi. The tipping point to dive in head first was the backlash I saw on a website which had regular rants and complaints about the sorry state of office spaces and serviced office areas,” said Lakhani, co-founder of InstaOffice, which offers managed office space on a sharing basis.

Terming it a “no brainer at that point since there were nil options,” Lakhani teamed up with friends to set up a business centre in Noida in 2013. “It was a typical conventional business centre. It had smaller offices within the large facility. We took it on lease and it did very well and broke even in four months. It had an annual revenue of ₹1.2 crore,” he said.

Given the mismatch in demand and supply of office space, Lakhani said the team “could negotiate some great deals” and ensure larger facilities. However, when in 2014, Lakhani wanted to scale up, he was “limited in my team, so I left that business centre”.

Lakhani then teamed up with InstaOffice co-founder Devendra Agarwal, who used to work at Dexter Capital, a boutique investment bank that advices start-ups about fund raising.

“The aim is to provide long-term, economically viable office space solution across the board. If they can use shared resources, they can optimise resources,” Lakhani added. In October 2015, the duo registered the company.

“We started our first centre in Gurgaon in February 2016. By July, we had four centres, all in Gurgaon. We are trying to give a superior experience of an office, though it is just real estate. An entrepreneur does not have the experience or energy to make friends, go out and socialise. He is intent on building a professional network of relations. Our office space ensures that smaller teams don’t have the overriding feeling that they are sitting in a basement,” Lakhani smiles.

The challenge, Lakhani said, “is to provide more of a single-solution play. Office is a product in which people have diverse needs. It could be someone who is running a chain of hotels, or it could be a courier company, or even a diaper firm. Since switching costs becomes exorbitant, we decided to offer office spaces that were 40-60 per cent cheaper compared with the meagre available options.”

‘Building communities’

Lakhani maintains that the firm is not just intent on building office spaces, but also “on building a strong community to foster entrepreneurship and innovation, through knowledge-sharing and mentorship. Our bi-weekly ‘Unwind Sessions’ are a step in this direction, and has received a good response.”

Co Founder Agarwal insists commercial real estate has been plagued by multiple friction points. “Two of them have been leases with long-term lock-in periods and availability of only large floor plates. However, users today need spaces which are highly flexible in time, area or layout of the space. Consequently, most landlords suffer from high vacancy periods and poor rental yields, not to mention legal hassles when clients do not complete their lock-in periods.”

InstaOffice looks at building an end-to-end office space solution, for teams of any size. The need is to bring a systemic change in the way commercial real estate, as an economic resource, is utilised, even as the firm attempts to bring down overhead costs for members. They are also engaging with landlords and partnering with them to help them earn better rental yields.

On Monday, InstaOffice said it has raised an undisclosed pre-Series A funding led by Globevestor, a California-based venture capital firm that has earlier invested in car-rental service Zoomcar, education portal OnlineTyari and lending platform Rubique. Angel investors, including Zishaan Hayath, co-founer, Toppr; Karan Chellani, Managing Partner, Capital; and Mohit Satyanand, Chairman, Teamwork Arts, also participated in the round.

This is the first external funding raised by the company.

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Published on January 10, 2017
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