Startups creating the demand for co-working spaces

India is the third-largest startup hub in the world.1 In 2021, 3,143 new companies were founded.2 This exponentially expanding market is playing a pivotal role in driving the growth of co-working spaces. Startups look for next-generation customizable offices to meet the demands of their young workforce which thrives in tech-smart offices and embraces collaboration opportunities.

Metropolitan cities like Bengaluru, Mumbai, and Delhi already dominate the Indian flexible spaces. However, the startup culture is spreading widely across the nation. In fact, Tier II and III cities like Ahmedabad, Jaipur, Coimbatore, Indore, Kochi, Lucknow are already witnessing vigorous activity in the co-working space.

Why do startups prefer co-working?

  1. Budding startups need an environment that encourages creativity and collaboration. With different professionals and talents working under the same roof, co-working space becomes a crucial learning space for startups.
  2. Co-working space offers an easy leasing model as it charges per occupied seat. From a financial standpoint, this becomes a favourable option, as it can save up to 20-25% rental costs while lending space in prime locations.
  3. Co-working spaces are fully managed, eliminating the hassles of setting up fundamental services such as internet and phone connections, cafeteria, conference rooms, etc., allowing teams to invest more time in the idea.
  4. The younger workforce strives for a unique culture that is different from a traditional workspace. The co-working workspace is synonymous with the state-of-the-art office as it allows flexibility, high-end services and amenities, networking opportunities, and much more.

It’s evident that flexible workspaces attract younger talents and vice versa. But with the uncertainties created by the pandemic and lockdowns, even bigger and medium-sized enterprises have started renting flexible co-working spaces for their teams. In fact, the leasing of flexible workspace by corporates rose by 73% to 31,538 seats during the January-June period on a year-on-year basis.3

Co-working occupancy by enterprises

  • With the whole pandemic crisis and the discovery of new variants, companies are uncertain about how the future will unfold. Hence, they prefer to remain flexible, instead of leasing a permanent space.
  • The concept of working from anywhere is a safer and economical option for companies today. Thus, businesses (especially consulting, IT, e-Commerce, etc.) are opting for satellite offices distributed across cities, enabling maximum flexibility.
  • Co-working offices offer added benefits – ease of scalability, cost advantage, and risk diversification, making it an easy choice for firms.

According to a CII-ANAROCK report, the co-working space market revenue will double over the next five years at a CAGR of 15%.4 There is a paradigm shift in the way companies operate and co-working is bound to become mainstream in the near future.


  1. India becomes third largest startup ecosystem in the world
  2. Indian startups record 3x growth to $35.4 billion in investments in 2021: Report
  3. Corporates’ demand for flexible workspace up 73% in Jan-Jun period
  4. 50% demand for our co-working spaces now from large MNCs: Awfis CEO Amit Ramani


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