For 30-year-old Ritesh Malik, taking the road less travelled seems to have made all the difference. A doctor by profession, Ritesh has donned many hats over the years – both as an investor and an entrepreneur.
After launching Innov8 in Delhi in January 2016, Ritesh, who is the co-founder of the firm, has come a long way. And so has his brainchild. From a 105-seater office space in the heart of Connaught Place to the recently launched 50,000 square foot campus in Gurugram, which is its 13th workspace, Innov8’s growth seems to be on the right track for growth. The firm is now looking to launch a centre in Hyderabad, which will be about 80,000 sqft.
“The first office’s success made us think we are doing something right. So, we started expanding,” Ritesh tells YourStory. Now, Innov8 is looking at scaling newer heights, and is aiming to become the largest coworking space in Asia.
In his journey of taking Innov8 from a single centre to 13 centres across Delhi/NCR, Chandigarh, Bengaluru, and Mumbai with an overall capacity of 6,000 seats, Ritesh says he has learnt a lot about coworking business. And one thing he knows is that “you cannot go wrong with locations,” he says.
Since the beginning, Innov8 caught investors’ attention. The company is backed by high profile angel investors including Vijay Shekhar Sharma, Founder, Paytm; Rajan Anandan, Head, Google India; Anand Chandrasekaran, Global Director of Platform and Product Partnerships, Facebook; and Girish Mathrubootham, Founder and CEO of Freshworks, among others.
Besides graduating from Silicon Valley incubator Y Combinator (which invests $120,000 for a seven percent stake), the Gurugram-based startup raised pre-Series A funding of $4 million in a round led by Credence Family Office in October last year. And, more recently, it was acquired by OYO for about Rs 220 crore.
Even as he refrains from divulging too many details, Ritesh says the deal was an outcome of fostering great relationships, and the confidence in the leadership. He adds,
“India is a mammoth country, which no one has been able to crack apart from OYO, which is also the only company that has cracked the China market. So, we realised they are doing something which is so good that no one else has been able to, and we were very fond of the leadership at OYO. In the past few months, we have learnt so much from them. We want to be India’s foremost coworking brand, and eventually scale in rest of Asia, and we realised that this won’t be the story if we don’t have a juggernaut like OYO behind us.”
Just what the doctor ordered
Thirty-year-old Ritesh graduated from Dr MGR Medical University in Tamil Nadu in 2013. While in medical school, he developed a keen interest in entrepreneurship. During his college days, Ritesh ‘bunked’ most of his classes, and managed to attend a short Marketing Science 101 course at the London School of Economics during his summer break. Here, he learnt about how the Silicon Valley was booming and buzzing with startups and sustainability.
However, a major breakthrough came in 2012 when Adstuck (a company co-founded by Ritesh in his final year of medicine) sold its flagship product (ALIVE) to the Times of India Group. After this, in 2013, Ritesh decided to study ‘Management of Innovation & Technology’ at the Harvard University.
He also founded the Guerilla Ventures, an angel fund, in 2013, and has invested in 45 startups so far across sectors like healthcare, information technology, innovation, SaaS, etc.
After being an investor for a couple of years, Ritesh felt the entrepreneurial itch again, and this is when he started Innov8 in Delhi in January 2016. He says the office space was in the heart of Connaught Place in Delhi, and it was fully sold out within 30 days.
“When I started investing in a lot of companies, I realised there was one massive gap in the country and that was good workspaces. Traditionally, workspaces have been very boring, and we spend 50 percent of our time in offices, which suck big time. Sometimes the internet is not working, or the AC is faulty, or there is no community and so on,” explains Ritesh.
Soon after its launch, Innov8 was picked up by Silicon Valley incubator Y Combinator for its 2016 batch. “We were told we should do large centres because with small centres we will not be able to become a $1 billion revenue company. At YC, we learnt that to be huge, we need to have large campuses,” recalls Ritesh.
So, Innov8 set up a 500-seater campus in Bengaluru, which also sold out in just two months. Today, from typically 25,000-27,000 sqft coworking spaces, Innov8 is now setting up 50,000 sqft spaces, and aims to do one lakh sqft workspaces soon. The upcoming Hyderabad Innov8 centre will be about 80,000 sqft.
“The idea is to take a large piece of the space, segment it rightly between enterprises, startups, freelancers, students, entrepreneurs, and SMEs, and sell it on four basic principles, location, design, community, and technology,” he adds.
View from the fort
Evidently, innovation is the name of the game for Innov8. After opening multiple centres across the country, the company is rethinking design by converting Old Fort in Saket, Delhi, into a 414-seater Innov8 campus starting this July.
“Office-going is an experience, so we thought let’s create something very fancy. It took us some time for approvals, lease from ASI, etc, but now people in Delhi can work out of a quila (fort),” reveals Ritesh. This is where perhaps the entrepreneurial conviction comes into play.
Similarly, the company converted a cotton mill in Bengaluru in Koramangala into an office space. Ritesh says the property was available at a rock bottom price, but nobody touched it because it was a nightmare to get the approvals and manage the authorities.
Ritesh says unit economics have improved for Innov8 because of the brand recall, and that each centre recovers the cost very quickly owing to 50 percent pre-sales and repeat customers.
He also attributes Innov8’s success to smart pricing, which can fit all budgets. “We started with one price initially, and now we have a Rs 4,999-per-month product and a Rs 20,999-per-month price as well. We have also launched a flexipass at Rs 2,999 per month so that people can opt for whatever they like.”
“We want freelancers and entrepreneurs to adopt coworking. Going ahead, our aim is to become a platform where people get whatever they want in an office so they can be more productive,” says Ritesh.
Easy to start, hard to survive
Real estate advisory company CBRE states that India’s flexible workspace saw a 277-percent jump in leasing to reach nearly three million sqft in the first quarter of the calendar year 2019.
Despite the fact that flexible workplaces (coworking and business centres) in India are growing at a rapid pace, Ritesh is not worried as coworking, while it has a low barrier to entry, becomes a challenge to scale in the long run.
He claims India has 387 players in total right now, and only 11-12 of them have more than two centres. “It is very easy to build one, but it’s very difficult to scale because it is an operationally intense business. This is not a business of one or two shop players; this is a business of scale, the business of the community,” he says.
And this is perhaps what refrains Ritesh from calling Innov8 just a coworking player. “The moment we start competing with a coworking player, we start diminishing our value. Our digital platforms like The Quest is a production house where we cover stories of people working at Innov8, and we also have our in-house monthly magazine Vyapar,” says Ritesh. He remembers the instance when two entrepreneurs met at Innov8 and started up together. This is the sense of community and a space for collaboration and innovation he wants to foster and build.
After the launch of its Gurugram centre in June, the company is now looking at cities like Hyderabad, Pune, and Chennai. “By the end of this year, we will have 24,000 seats, with 30-32 centres,” says Ritesh.