Coworking Business Model Masterclass

Business Model Masterclass VISHAL GUPTA Co-‐founder and CEO New Delhi, 10th Sep 2016

PUTTING THINGS INTO PERSPECTIVE IntroducEon

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My Journey

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Vishal Gupta Entrepreneur | Investor | Ex-‐ Investment Banker | Startups, Technology & Coworking

MISSION: To make entrepreneurship and invesEng in entrepreneurship accessible to all by breaking barriers to informaEon, access and investment

Investment Banker

Corporate Business leader

Investment Manager, Advisor, Freelancer

2002

2012

2015 Full-‐Hme entrepreneur, investor and connector

Hong Kong

London

Property

Renewables

Tech

2016: Could things be any beVer for coworking? How WeWork has changed the game for everyone

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5 mn sq O

$1.4 bn

raised

$16 bn

value

Source: Crunchbase, WSJ reports

2003: When things were not so good How Regus went bankrupt

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•  Economic downturn •  Over-‐supply of office space •  Fixed long leases in US •  Rentals agreed at peak of market •  Sharp downturn in passing rents •  Reliance on dotcom and startups –

demand fell away

Dot-‐com bubble burst

1989 – 1st Regus opens in Brussels

1990s – Rapid growth fuelled by startups mushrooming

2000 – Regus IPO

2001 – Expansion across Europe, Americas, Asia

2003 – InternaEonal business operaEng in 52countries

2003 – Regus files for Chapter 11 bankruptcy for its US operaHons, sells stake in UK business

What went wrong?

How they changed? •  Corporate restructuring

•  Property JVs, profit sharing partnerships with landlords

•  Shib to 30-‐40-‐30 mix (large corp-‐SME-‐startup)

Financing a coworking space

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Average size of coworking spaces has doubled in 2 years Need to find new avenues for capital, (also revenues)!

Source: Deskmag Global coworking survey 2016

WHERE ARE WE HEADED Emerging global business models and case studies

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Towards mulE-‐accelerator and ecosystem models

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Incubators

GestaEon focus 5-‐15% equity

Discounted services Equity-‐based rent

Accelerators

Investment focus 3-‐10% equity

Structured programme Equity-‐based rent

Coworking

Community focus No equity

Events + networking Cash-‐based rent

Hybrid Ecosystems

Industry incubator host In-‐house accelerator Investment fund Coworking space Corporate offices

Corporate and startup collaboraEon

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•  For tech startups and corporate innovaEon professionals

•  Large campus -‐ AVracEon of scale •  Curated community – by applicaEon

only •  Alumni include Uber, SpoEfy, Supercell •  For Tech startups

•  Focus on funded tech startups •  Coworking plus growth services

•  For corporates •  Industry accelerator programme •  Corporate memberships targeted at corporate

innovaEon professionals

•  Started with $20,000 and 30 desks in 2011

•  Now 7-‐floor campus in SF •  New campus opening in London in 2017

with 1,500 capacity

•  ObjecEve: To develop Intrapreneurs who think and work like startups

•  Week-‐long immersion programme at SF campus with 25 Tata CommunicaEons execuEves from across the world

•  Onsite visits to local tech innovators

Case study: How Rocketspace worked with Tata CommunicaHons

Corporate-‐backed accelerator

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•  Telefonica’s startup accelerator •  Access to Telefonica business

development network and contracts •  Programme offering:

•  50,000 in cash + 50,000 in services •  7-‐10% equity stake •  8-‐12 months of space

•  130 startups over 4 years •  Corporate acceleraEon – providing

insight and guidance to other mulEnaEonal coporates looking to launch their own acceleraEon programmes

Wayra

Pushing the boundaries: VC + IP + Incubator

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•  Europe’s first Chinese capital-‐backed ecosystem

•  70,000 sq b / 800 capacity coworking space in prime London

•  Business accelerator programme •  Separate IP management company

and business transfer plarorm •  Cocoon Ventures – InvesEng in tech

companies with potenEal to be scaled to China

Cocoon Networks

AcceleraEng growth, expanding revenue streams

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•  VC-‐backed accelerator programme •  Founded in Paris in 2013 •  3 pillar approach:

•  EducaEon •  Unfair advantages (deals) •  Access to capital (VC network)

•  Up to 5% equity stake •  Industry and stage agnosEc •  Non-‐cohort approach, 400+ porrolio

companies •  AcEve content strategy – 2.5 m

Youtube views •  Expanding across Europe

The Family

•  Entrepreneur school – Weekend training programmes for aspiring entrepreneurs

•  Startup Studio – helping big companies to create startups

Expanding revenue streams

Zero equity accelerator

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•  Non-‐profit startup accelerator and compeEEon

•  Focus on early stage entrepreneurs •  Zero funding and zero equity stake •  ParEcipants compete for a prize of

£500,000 at the end of each programme

•  4 months per programme •  Free office space, mentoring,

workshops and global network access •  Supported by corporate sponsors and

partnership deals

Mass Challenge

Corporate backed insEtuEonal financing

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www.market-tech.com 24

COWORKING SPACESPACE AS A SERVICE IS ONE OF THE BIGGEST OPPORTUNITIES IN REAL ESTATE

ACCESS TO A FULL ECOSYSTEM The opportunity to work, collaborate and socialise within a likeminded community

MAXIMUM FLEXIBILITY AROUND SPACE & LEASE LENGTHYou rent exactly what you need, no wasted space from renting too large offices or commitment to long term contracts – you can grow within the same space

CONVENIENCEFrom additional offices, to multiple meetings rooms, to comfortable break out areas and restaurants all fully serviced, cleaned and maintained, all included in the rates

NO UPFRONT COMMITMENT & CAPEXNo initial capex required or time wasted on fitting out your own office

KEY BENEFITS TO SHAREHOLDERS

KEY BENEFITS TO OUR GROWING PROFESSIONAL COWORKING COMMUNITY IN CAMDEN

� Multiple revenue growth from rents, services and additional spend in foods and markets.

� Coworking and growing a community of technology & creative businesses in Camden Town is an

important pillar of our place-making strategy

•  Market Tech acquired cluster of adjoining retail markets in Camden for $650 million

•  16 acre of prime real estate porrolio in Camden Town

•  Mar 2015 -‐ Market Tech acquired Interchange building for £49 mn

•  Oct 2015 – Interchange Triangle 13k sq b, 278 desks •  May 2016 – Atrium 30k sq b, 650 desks •  3rd locaEon Utopia to be launched •  2017 – 1500 desk, music coworking, fashion

coworking

Developing a coworking cluster

How they financed it? •  $642 mn capital market financing over 6 months •  Dec 2014 – IPO to raise $156 mn •  Mar 2015 – ConverEble to raise $174.4 mn •  Jul 2015 – Secondary to raise $311 mn •  Debt refinanced with 10 year facility with AIG £900 mn

Crowdfunding a coworking space

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•  Coworking space for migrant entrepreneurs in East London

•  150 member space •  Building a niche community

•  Migrant business accelerator •  Migrant business show •  PublicaEons

•  The community will also finance •  Raised £100k via crowdfunding

campaign on SEEDRS •  Offer discounted membership as

incenEve •  Covers fit-‐out and iniEal lease cost

•  Important to have early backers BEFORE you launch a campaign

•  Build and appeal to a community •  Offer a reward •  Campaigns with tangible product to

sell do beVer – your customers also become your financiers

•  Co-‐working spaces can offer long term discounted membership as incenEve

How to run a crowdfunding campaign

WHAT IT TAKES TO SUCCEED Brainstorming

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What it takes to succeed? Themes: Let’s discuss •  Campuses v/s Mega-‐centre v/s mulEple smaller centres

•  City-‐centre v/s suburban locaEon •  Commercial v/s Industrial buildings •  Equity based rent v/s cash based rent •  Parent level or locaEon based financing •  How to solve the long lease – short rent problem •  Crowdfunding •  Equity v/s debt

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What it takes to succeed? Defining your Golden Circle

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WHY

HOW

WHAT

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What it takes to succeed? Defining your Golden Circle

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MY BUSINESS WHY?? •  XX •  X

HOW?? •  XX •  X

WHAT?? •  XX •  X

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What it takes to succeed? Standing out from the crowd: Purple Cow

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2

What it takes to succeed? Standing out from the crowd: Purple Cow

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2

MY BUSINESS NOW – What am I doing differently? •  XX •  X

FUTURE – What can I do differently?? •  XX •  X

What it takes to succeed? Where can I turn to for finance:

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3 White Knight

Friends & Family Angels VC

Venture equity

Venture debt

PE

Banks

Pension Fund

LOC

Warrants Structured credit

Property JV

Corporate partnership

Overseas capital

M&A HNI

What it takes to succeed? Where can I turn to for finance:

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3

MY BUSINESS Sources of finance I have considered? •  XX •  X

Sources of finance I could consider? •  XX •  X

White Knight

Contact details

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Vishal Gupta Co-founder, CEO

Founder

Tech Startups SocialMedia

London, United Kingdom

www.kabeela.life

[email protected] +44 (0) 7788 491 774

Investment

Fundraising Community

@vishthink

Coworking