Spacemob-ster
By Cecilia Chow
/ The Edge Property |
Coworking start-up Spacemob opened on Sept 1 with 15,000 sq ft of space at 8 Claymore Hill. Within two months, it had secured 200 members and an occupancy rate of close to 90%, entirely through digital marketing platforms. The business turned a profit within three months of opening, says its founder and CEO, Indonesian-born and US-educated Turochas “T” Fuad.
He sees Spacemob as a tech company and not a spin-off from a property business. His choice of the company name ‘Spacemob’ was also intentional. “I don’t mention ‘work’ because the intention is to disrupt the space industry, and it goes beyond work space.”
Fuad: I intentionally chose the name ‘Spacemob’. I don’t mention ‘work’ in the name as the intention is to disrupt the space industry beyond work.
Serial disruptor
Fuad also founded Travelmob, an online social platform that connects travellers to Asia-Pacific with hosts of apartments and villas, similar to Airbnb. Started in July 2012, Travelmob was acquired by Nasdaq-listed HomeAway in 2013. “I came up with Travelmob to disrupt the travel industry,” he says. Prior to its founding, he was managing director of Skype Asia.
A serial entrepreneur, Fuad began thinking about the idea of Spacemob a fortnight after leaving Travelmob. While the likes of Airbnb, HomeAway and Travelmob have transformed the travel industry, he noticed that the rest of the property market, particularly commercial space landlords, have not evolved or adapted to working citizens who have embraced the sharing economy. “Gone are the days of permanent employment,” says Fuad. “Freelancers will represent a bigger part of the working community.”
Spacemob differentiates itself through the use of technology. Booking of meeting rooms and spaces are done via registration booths. Payment for coffee and other items are made via an eWallet system. All the furniture pieces also have a radio frequency identification (RFID) tag — to keep track of office inventory and analyse the frequency and duration of each space used. If a certain space is seldom used, they can then identify the issues and find a solution. This helps optimise the use of every space within the coworking centre, explains Fuad.
As part of its services for members, Spacemob also provides health insurance, payroll processing software, payment gateway solutions for ecommerce, and even travel at preferential or corporate rates. “Of course, having a comfortable work space is important, but ultimately, it’s the services that come with the membership,” he says. “Space, therefore, becomes secondary.”
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‘Levelling the playing field’
Fuad sees Spacemob levelling the playing field for members: “Whether you’re a freelancer working alone or a company with 50 people, you enjoy the same benefits. Coworking helps small companies grow, and big companies become nimble.”
He feels that providing the basic administrative and business services such as corporate secretarial services, bookkeeping, staff payroll and CPF contributions needed by most companies — be they fledgling start-ups or small and medium-sized enterprises — frees up members to focus on their core business.
Members will be able to tap each other’s expertise as well. Among Spacemob’s members are a corporate secretary and an accountant. Another is Insight Guide, which is seeking to rekindle its business by moving from offline to a digital platform. And it hopes to do that by locating its staff within a “tech- savvy community”, says Fuad.
Besides tech companies, there are a number of freelancers, a public relations company, a jewellery designer, an F&B operator and The Golden Duck, which invented salted egg chips. Another member is specialist music agency Big Sync, a partner of Unilever Ventures — the venture capital and private equity firm of Unilever. Big Sync supplies music services for all of Unilever’s brands.
However, the anchor at Spacemob is General Assembly, an education and career transformation centre that has four classrooms within its training facility. Spacemob members can take up courses at a discounted rate to learn about the new economy and how to further their skill sets, adds Fuad.
“We work with General Assembly because it is famous for spawning entrepreneurs,” he continues. “And it’s just 10 steps from our coworking space, where they can take up a desk and start their business.”
The café and social area at Spacemob
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Asset-light strategy
According to Fuad, the biggest differentiator between Spacemob and other coworking operators is that he does not pay rent to the landlord. Instead, he has a revenue- generating scheme to help the landlord increase the return on the asset.
He co-invests with the landlord of the space at 8 Claymore Hill on all the furniture and fixtures as well as the operating system that forms the backbone of the business. “It’s a bit like the relationship between a hotel owner and manager: We’re the hotel manager and we operate the space and generate a return for them. To the members, we’re the master tenant,” Fuad says.
That explains why it was able to break even and achieve profitability over a shorter period of time even though Spacemob’s rates are below most of its competitors’, he explains. “We want to be asset-light, so we don’t buy or rent property. We help the landlord achieve a higher return on the space.”
And he is able to do that by slicing and dicing every square foot of the available space. Some spaces are charged a daily rate, while others are on hourly, weekly or monthly rates. “The landlord is therefore able to achieve a higher yield on the property, and with the RFID tracker, we’re also able to optimise the use of every space and every piece of furniture,” Fuad says.
Spacemob has a six-year lease at 8 Claymore Hill, which is owned by Brunei Investment Agency’s Sajahtera Investments. Within the building is also the 8 on Claymore serviced residences. Spacemob members enjoy special rates when they book those serviced apartments as well as hotel rooms at Royal Plaza on Scotts, another Sajahtera Investments property, according to Fuad.
Regional expansion
In November, Spacemob announced that it had closed a US$5.5 million ($7.9 million) seed funding round — the largest ever recorded in Southeast Asia. The funding round was led by Temasek Holdings-linked Vertex Ventures Southeast Asia. Other investors included VC firm Alpha JWC Ventures, as well as angel investors in the property and hospitality industries.
Fuad has plans to open two more Spacemob centres in 1Q2017, in Singapore and Jakarta. He sees the possibility of having the second site in the western region of Singapore and the possibility for a third site somewhere in the city fringe. “A coworking space doesn’t have to be in the CBD; it can be anywhere centrally located near amenities such F&B outlets, shops and transport [facilities],” says Fuad.
In addition to a physical ecosystem, Spacemob is building an online platform called Members’ Circle — a sort of Tinder for corporates and freelancers to meet each other, he adds. The plan is to have a regional network through which members in Spacemob centres across Asia-Pacific can link up with each other.
This is part of Fuad’s plan to have 30 Spacemob centres in the region within the next three years. “Vietnam is high on the list, so we’re looking at Ho Chi Minh City, and Bangkok in Thailand as well,” says Fuad. “When members take up a space here in Singapore, they automatically become part of the Members’ Circle. They not only benefit from the tech advances, productivity enhancements and other perks of our operating system, but they can tap the regional ecosystem, both off- and online.”
This article appeared in The Edge Property Pullout, Issue 760 (Dec 26, 2016) of The Edge Singapore.
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