WORQ, a Malaysia-based coworking and flexible space provider, has successfully completed its latest fundraising round, backed by 14 follow-on investors.
WORQ said in a statement on Tuesday that the global asset management firm, Phillip Capital, helms this round with its largest placement to-date and its third consecutive investment into WORQ.
It said the achievement underscores WORQ’s exceptional track record of profitability and its dominant market position.
While this internal pre-Series B round primarily caters to its existing investors, it said preparations are underway for a Series B round with external investors in the near term.
According to the statement, the funding raised will be fully utilized for space expansion.
WORQ said it is currently on track to double its space under management by the end of 2023 and aims to triple that space to 450,000 square feet by 2025.
Looking ahead, WORQ sees the opportunity to become the best space-as-a-service provider with the widest office network in Malaysia.
The company aims to become the ‘Amazon of office spaces’ by providing scalability to office users, similar to that of Amazon Web Services in cloud computing.
The firm also has plans to further expand its space under management to a sizable 3,000,000 sqft by 2030.
To date, WORQ has incubated 300 startups and 100 tech companies with plans to enable over 10,000 workers by 2025.
“Southeast Asia has become a prime location for many businesses looking to diversify and build their global supply chain，
“The Malaysian market is strategically positioned to capture these opportunities as we are a diverse, multilingual country with an educated talent pool and a robust SME supply chain,” said Stephanie Ping, Chief Executive Officer and Co-Founder of WORQ.
As a growing economy, she said they must improve the ease of doing business in Malaysia by making hiring easier for companies.
She noted that infrastructure issues can be a significant hurdle for businesses looking to invest in a new market and WORQ’s innovative Space-As-A-Service model provides clients scalability and flexibility through its network of cloud offices.
According to her, the firm has built a network of one-stop business centers that serve as vital infrastructure for foreign and local business formation in Malaysia.
“We see this as a foundational part of the cycle of job creation, upskilling and knowledge transfer,
“This vibrant business ecosystem will create high-income jobs to secure Malaysia’s long-term sustainable development,” she added.
In 2023, WORQ achieved strong revenue growth of 80 percent while maintaining mid-teen net profit margins.
This success is attributed to WORQ’s demand-centric strategy, which aims to achieve both outstanding risk management and hypergrowth simultaneously.
WORQ noted that the demand for flexible office space continues to accelerate, with the firm achieving an average of two months to fill its new space expansions.
In addition to its traditional coworking clientele, which includes tech startups and small and medium-sized enterprises (SMEs), WORQ is experiencing increasing demand from global firms expanding into the region.
It said corporate clients are prioritizing agility and choose to use coworking spaces because they can swiftly deploy and go-to-market quickly while remaining asset-light.
It is note that corporate clients now account for 70 percent of WORQ’s demand compared to only 20 percent before the pandemic.
Recognizing this trend, it said several landlords and Real estate investment trusts （REITs） are partnering with WORQ to provide these solutions to their buildings, gaining a competitive edge in attracting additional tenants and subsequently boosting rental yields.
“As an investor of WORQ, we have witnessed the rapid growth and the world-class services they provide. WORQ’s adept cost management and efficient growth strategy positions them as a scalable and sustainable business model, capable of competing not just locally but also on a global scale,
“We value founders who can anticipate industry trends, and WORQ’s team has undeniably demonstrated their strategic foresight, a quality that gives me confidence in their future success,” said Linus Lim, Chief Executive Officer of Phillip Capital Management.
Rachel Leong, Director of Group Strategy and Operations at Mah Sing Group, who led this investment for the Leong family office said the firm is optimistic about the growth in demand for flex spaces and are thrilled to be part of WORQ’s growth journey.
“With a customer-first approach, prudent financial management, and disciplined execution, we have full confidence that WORQ will continue its growth story in the coming years,” she said.
Cradle acting group Chief Executive Officer Norman Vanhaecke said that Cradle is behind WORQ all the way, as they are vital to the ecosystem for the growth of startups.
“Once companies receive funding, having a robust community of entrepreneurs to plug into is very important,
“To stay competitive in the world stage, it is imperative that we encourage the good work that WORQ is doing as they have a lot of positive spillover effects for the good of the country,” he added.
Cited JLL Research, WORQ said the current market penetration for flexible offices in Kuala Lumpur is only around 1 percent, compared to the regional average of 3 percent.
As JLL predicts that the demand for flexible office solutions will increase the penetration rate to 30 percent by 2030, WORQ said this signifies substantial growth room for the firm.
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