Sumit Lakhani Discusses Awfis' Growth Journey, IPO, IIT Partnerships, and Expansion Plans
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In this exclusive interaction with StartupTalky, Mr. Sumit Lakhani, Deputy CEO of Awfis Space Solutions Ltd., talks about Awfis’ journey from a co-working startup to India’s largest integrated workspace solutions company. He explains their flexible workspace offerings for startups, SMEs, and large corporations and discusses Awfis' exciting partnerships with IITs to support entrepreneurship. Lakhani also shares an inside look into the strategic milestones of Awfis, including the experience of the Awfis IPO and ongoing plans for expansion into Tier 2 cities. He also talks about his vision for the company and how Awfis is using technology to enhance its offerings.
StartupTalky: Give us a brief overview of Awfis Space Solutions Ltd and its evolution from a co-working space to an integrated workspace solutions platform.
Mr. Lakhani: Awfis Space Solutions Ltd. has evolved from a pioneering co-working provider to a comprehensive workspace solutions platform, meeting the changing demands of India’s modern workforce. Established with a vision to be the workplace of choice for the global workforce., Awfis initially focused on creating collaborative, flexible co-working spaces across major cities. This foundation soon evolved into an integrated platform catering to a wide spectrum of workspace needs.
Today, Awfis supports businesses of all sizes, including startups, SMEs, and large enterprises, by offering agile workspace solutions that range from co-working and enterprise-managed offices that cater to all their business and employee needs. Its ability to respond dynamically to evolving market trends—particularly the rise in demand from Global Capability Centers (GCCs) and Tier 2 cities—has fueled its growth and market reach. Through ongoing innovation and strategic expansion, Awfis has solidified its position as a leader in India's workspace solutions industry, driven by a commitment to flexibility, scalability, and design excellence.
StartupTalky: What types of flexible workspace solutions does Awfis offer, and how do these meet the different business needs of startups and large corporations?
Mr. Lakhani: Awfis delivers a broad spectrum of flexible workspace solutions tailored to the distinct needs of startups, SMEs, and large corporations. Our offerings include coworking spaces, managed offices, design & build solutions, mobility options, and a range of allied services. With a robust product portfolio and extensive network, we serve freelancers, entrepreneurs, startups, SMEs, and large corporations across India and Global Capability Centres (GCCs). Awfis’ solutions combine agility, scalability, and customizability, empowering startups to prioritize growth and equipping large corporations with dynamic, cost-effective spaces that seamlessly adapt to evolving business demands.
Lakshya Singh
StartupTalky: How will Awfis support startup growth through its partnership with IIT Kanpur, IIT Bombay, and IIT Madras in flagship events like UpStart 2024, Eureka 2024, and Elevate 2025 with workspace credits and mobility solutions?
Mr. Lakhani: We are thrilled to empower the next generation of startups through our partnership with IIT Kanpur, IIT Bombay, and IIT Madras. As India’s largest flexible workspace provider, Awfis is dedicated to promoting entrepreneurial growth and supporting innovative ideas. Through this collaboration, we are offering winners 100 hours of workspace credits, 50 hours for runners-up, and a 25% discount on our mobility solutions, which include access to meeting rooms, day passes, virtual offices, and our Virtual Office Plus offering—each designed to meet the dynamic needs of early-stage businesses.
Born from an entrepreneurial spirit, this partnership underscores our commitment to driving innovation and supporting startup success. By providing flexible, convenient workspaces, we enable startups to focus on what truly matters which is disruptive ideas that will enhance India’s position on the world map. We are proud to support the startup ecosystem and look forward to the remarkable ideas emerging from UpStart 2024, Eureka 2024, and Elevate 2025.
StartupTalky: Awfis recently entered into a business transfer agreement with SMS Integrated Facility Services. Can you explain the strategic significance of this move for Awfis?
Mr. Lakhani: Awfis entered into a Business Transfer Agreement with SMS Integrated Facility Services Private Limited (“SMS”), for the divestiture of its Facility Management division – Awfis Care for a sale consideration of INR 27.5 crores. SMS Integrated Facility Services (SMS IFS) Private Limited, a Samara Capital company, is one of India's leading pan-India integrated facilities management firms. Awfis will benefit from the expertise of a specialized player like SMS with their distinctive capabilities in people management, digital operations, and facility cost optimisation, while maintaining the highest standards of compliance and governance.
This move will reduce Awfis’ administrative overheads, and compliance requirements, and enhance operational efficiencies. Additionally, the transaction will be cash flow accretive, freeing up working capital and leading to improvement of the working capital cycle. This increased liquidity will provide the company with additional financial bandwidth to invest in growth and expansion.
Swetlana Neog
StartupTalky: What is Awfis' business model, and how does it differentiate itself in the competitive flexible workspace market?
Mr. Lakhani: We operate under two leasing models: Managed Aggregation and Straight Lease. The Managed Aggregation model, pioneered by Awfis, is an asset-light and risk-averse. In this approach, we partner with landlords/developers, who typically cover part or all the fit-out capital expenditure. Under the Straight Lease model, we lease space from developers or property owners under traditional terms. This includes a fixed monthly rental, common area maintenance charges, security deposits, minimum lock-in periods, lease tenure, and escalations. Awfis fully funds the capital expenditure for fitting out the property.
In Design & Build we partner with the clients and create designs as per their business requirements. We also offer Mobility solutions which include day passes, meeting rooms, and virtual offices suitable for freelancers and new entrepreneurs/startups.
StartupTalky: Who are your primary clients, and what has been the feedback from them regarding Awfis’ services?
Mr. Lakhani: We cater to a diverse client base, comprising 68% Corporate MNCs, 20% SMEs, 11% startups, and a small segment of freelancers. Our clients, both domestic and international, consistently commend the comfort and convenience they experience at every Awfis centre. With thoughtfully designed spaces that blend aesthetics and functionality, we enhance productivity and support employee well-being. Our vibrant community events further promote collaboration, conversation, and connection, creating a dynamic work environment for all.
Shevaughn Pimenta
StartupTalky: Are there any plans for expansion in terms of new locations or service offerings in the coming year?
Mr. Lakhani: We are driving expansion through both geographic reach and diversification of our offerings, introducing products and services that elevate client experiences, streamline business operations, and empower clients to focus on their core growth strategies.
Our plans include a stronger presence in Tier 2 cities, where the demand for flexible workspaces is steadily rising, providing businesses access to premium work environments outside major metro areas.
Across our portfolio, we are set to add 40,000 new seats by the end of FY25, further consolidating our position in this dynamic market. This growth is propelled by the rising demand for flexible workspaces, a thriving startup ecosystem, and the robust expansion of Global Capability Centres (GCCs).
StartupTalky: Can you share insights into Awfis' financial performance since its IPO? How has the share price reacted to the broader market trends?
Mr. Lakhani: Since our IPO, we have demonstrated consistent and growth-oriented performance. Revenue from operations has increased by 37% year-over-year, while operating EBITDA surged by 56%, resulting in an operating EBITDA margin of 30.7%.
Our successful IPO reflects our commitment to financial prudence and strategic growth. Over the past year, we launched 50 new operational centres, adding 33,641 seats. This represents a year-over-year growth of 43% in operational seats and a 40% increase in operational centres. Notably, 10% of these new centres are located in Tier 2 cities, highlighting our ongoing expansion strategy in these emerging markets.
Post-IPO, Awfis' share price has demonstrated robust growth. As of November 5, 2024, the stock closed at INR 728.80 on the NSE, reflecting a significant increase from its listing price.
StartupTalky: What strategies did Awfis implement during its IPO process, and how have they contributed to the company’s current standing in the market?
Mr. Lakhani: Clear, open, and most importantly planned communication has been a cornerstone of our organisational growth. We regularly organised town halls to ensure that every teammate at all levels, is informed and aligned throughout each aspect of the business.
Before the official IPO process began, we had an offsite where in an open forum we laid out our IPO mission. This was followed by a leaner growth meeting with next-in-line leaders to chart out a strategic short-term path and long-term metrics. A core IPO team was formed to adhere to and drive the process. Navigating the IPO process required strict adherence to regulations, complete transparency, and timely stakeholder communication.
Our external advisors were instrumental in assessing IPO readiness, shaping our narrative, and building investor confidence. Well-coordinated roadshows generated significant interest, while our legal counsel ensured compliance with regulatory standards, simplifying the complex documentation process.
Founded just nine years ago, Awfis was the first company in the flexible workspace sector to go public, facing unique challenges and without any precedents to guide us. At that time, coworking was still an emerging concept and had yet to establish its significance in the real estate market. Our oversubscription of 108 times not only provided a substantial boost to the flexible workspace industry but also solidified our position as a trusted leader, enhancing investor confidence.
Today, Awfis stands at the forefront of India’s coworking landscape, recognized for its diversified portfolio, extensive network, and transformative impact on the flexible workspace sector.
StartupTalky: How do you envision Awfis evolving in the market following the IPO, and what growth opportunities do you foresee?
Mr. Lakhani: The growing startup culture, the rise of Global Capability Centres (GCCs), and the increasing demand for flexible workspaces—preferred by both modern employees and corporations for enhancing productivity and promoting employee well-being—have solidified the position of flexible spaces within the commercial real estate sector.
As the only publicly listed player with the largest network in the country, Awfis stands out as the preferred provider of flexible workspaces. Our robust growth in the flex space industry is further underscored by the overwhelming success of our IPO, which was oversubscribed by 108.56 times. This achievement has enhanced our brand visibility, boosted investor and market confidence, and reinforced our status as a leading and trusted flex space provider in the commercial real estate market.
StartupTalky: How does technology play a role in enhancing the services provided by Awfis, especially in the context of hybrid work environments?
Mr. Lakhani: Awfis offers a comprehensive suite of services within a diversified product portfolio, including TechLabs, where the company has developed advanced IT protocols and cutting-edge technology infrastructure. These measures not only safeguard sensitive information but also shield clients from cybersecurity threats.
Awfis integrates smart access and visitor management systems for enhanced on-site security, ensuring seamless tech-driven operations. In addition, the company provides advanced technology support through Data Center solutions, Cloud Computing, Network Solutions & Integration, Client-Side Computing, and a full range of Software & Hardware solutions. With robust cybersecurity solutions and a fully functional digital workplace, Awfis enhances efficiency and confidentiality for clients. Through user-friendly mobile apps, tenants can easily book workspaces and access services, elevating the overall experience.
StartupTalky: As the Deputy CEO, what is your personal vision for Awfis, and how do you plan to lead the company towards achieving its goals?
Mr. Lakhani: We recognize that the future of work requires a blend of flexibility, adaptability, and innovation. Today’s demand for commercial workspaces is driven by a diverse ecosystem of large corporations, mid-sized companies, small businesses, and startups. The IT sector, historically the dominant consumer of these spaces, now shares that demand with IT offshoring, Global Capability Centres (GCCs), BFSI, and India-focused IT companies.
Additionally, post-pandemic demand for flexible spaces has tripled, a trend we expect to continue given the appeal of convenience and customization—placing us in a strong position for growth. Our Design & Build solutions allow us to craft spaces tailored to meet clients’ unique business, aesthetic, and employee requirements.
Meanwhile, our mobility solutions empower freelancers, new startups, and solopreneurs with flexible, ready-to-use infrastructure that supports their specific needs in a hassle-free manner.
We want to build a transformative workspace ecosystem that not only promotes innovation and collaboration but also drives sustainable growth for businesses across India. Our aim is to expand across India, reaching every corner to empower entrepreneurs with a platform for growth and innovation, becoming integral to India’s growth story. This comprehensive approach will enable Awfis to continue evolving as a leader in the coworking space industry, delivering value to our clients, communities, and stakeholders alike.
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