Now is a good time to be in the co-working industry in Southeast Asia, it seems. Barely days after WeWork announced plans to enter the region, which is home to over 600 million people, through the acquisition of Singapore startup Spacemob, now a company that operates like an Airbnb for office space rentals has raised money.
FlySpaces, a startup headquartered in the Philippines, raised $2.1 million this week in funding round described as pre-Series A.
The company operates a service that aggregates a selection of co-working spaces in six cities across Asia — Manila and Cebu in the Philippines, Singapore, Hong Kong/Macau, Kuala Lumpur and Jakarta. It was launched in 2015 with $500,000 in initial financing, and CEO and co-founder Mario Berta was previously with Rocket Internet’s Uber rival Easy Taxi.
While its core focus is office space rentals, Berta told TechCrunch that FlySpaces has diversified into other enterprise verticals including event venues, retail space and corporate dining. He said other expansions may see it move into billboard spaces.
“We’re looking at how we can cross sell other things into this space once we acquire a customer,” Berta said.
On the business side, the FlySpaces makes money through commissions on bookings made through its site. It retains a cut when a customer that first found a space through its service signs on for a longer leasing, Berta confirmed. That seems essential when most people might book a day or another short lease to test an office before committing to a longer booking. In addition, the company also runs some ads selectively, but that accounts for less than 25 percent of income.
Berta said his company is already profitable but it sought out investment to ramp up its growth through hiring, increased marketing and product development. The backing comes from undisclosed players in the retail space — although one named investor Net Group co-president Raymond Rufino — because Berta found that tech VCs “don’t understand” the FlySpaces business. But he admitted that there’s the potential to be more strategic with these backers.[gallery ids="1526046,1526047,1526048"]
FlySpaces already covers the main markets where English is a primary language for business in Southeast Asia, and Berta said that while there is no immediate plan for further country launches, he’d like to be in all ASEAN countries eventually. That’ll necessitate moves into Thailand, Vietnam, Laos and Cambodia at some point.
Speaking generally on the industry — which now includes WeWork in Southeast Asia — Berta said that one of his biggest frustrations is that co-working spaces are commonly thought to be focused on tech startups and freelancers. A point he said isn’t true.
“It’s huge misconception, the money is in SMEs and corporates,” he argued. “It’s ideal for companies who don’t want to invest in capex and want to maximize their office space.”
Some of the customers that have used FlySpaces include Google, P&G, Media Corp and Uber, according to its website.