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The funds will enable WORQ to expand its managed co-working space to one million square feet
Malaysia-based co-working space WORQ has raised RM10 million (US$2.4 million) in a venture funding round, the company announced in a statement today.
The round was raised from seven of the company’s existing backers. While the full list of investors was not disclosed, the group of investors included regional investment group Phillip Capital, the statement noted. The company has also secured loan offers from six banks.
WORQ will be putting the funds toward expanding its space ten-fold to cover one million square feet. It added that the company also aims to expand its portfolio by acquiring or partnering with other co-working space operators and landlords.
Based in Kuala Lumpur, the co-working company was launched in March 2017 and has been profitable since, the statement said.
It currently operates at four locations across the Klang Valley and offers flexible workspaces and facilities small and large-sized businesses, from entrepreneurs, startups, and small and medium enterprises to multi-national corporations.
“WORQ’s strategy is to offer tailor-made solutions and extreme flexibility to companies. This is comparable to that of ride-hailing services, which offer on-demand rides one at a time. WORQ sells office usage to companies one desk at a time, eliminating the need to rent and fit out an office,” Co-Founder and CEO of WORQ, Stephanie Ping said in the statement.
“WORQ’s Space-On-Demand solutions allow companies to implement a distributed work style. In this new environment, WORQ can sell one desk multiple times over and increase efficiency of space usage,” Ping added.
The co-working company is targeting the Flexi-Office market in Malaysia that it expects to grow to RM3 billion (around $720 million at current rates) by 2030, the statement noted.
The company had last raised RM10 million ($2.5 million) in funding from backers including Bangsawan Consulting and Phillip Capital in 2018. Since then, WORQ has been able to increase its footprint by 7x and grow its revenue by 560%, the statement said.
Noting that fundraising amidst the COVID-19 pandemic is challenging, VP of MDEC’s Global Growth Acceleration Division, Gopi Ganesalingam said, “MDEC is exceptionally proud of WORQ as one of the seven certified Malaysia Digital Hubs. WORQ has proved its mettle as a formidable startup and community builder through their collaborative programs.”
“MDEC will continue to render full support towards WORQ’s involvement in fortifying Malaysia’s startup ecosystem,” Ganesalingam added.
The market for coworking spaces is looking optimistic, but cautiously so. An estimated five million people are expected to work from coworking spaces by 2024, a spike of 158% from 2020 numbers.
At the same time, WeWork’s near-bankruptcy and subsequent strategy shift have made clear that bottlenecks with revenue models and monetization of high-cost real estate within this proptech industry can lead to an ugly tumble.
“WORQ has definitely found the elusive secret sauce for the Space-On-Demand market. Its fast growth model, coupled with a low-risk profile, is one of the healthiest and rewarding models out there,” Co-founder of JobsCentral and third-time follow-on investor in WORQ, Huang Shao-Ning said about WORQ’s business model in the statement.
Header image by Andrea Davis on Unsplash