Dubai co-working startup eyes new funding as it goes global

The Place

Hotdesk, an on-demand workspace booking platform based in Dubai, is preparing to launch a Series A round of funding as the startup continues to enjoy exponential growth throughout the region and globally.

The company, which provides access to co-working spaces at the click of a button, was launched in 2021. It has since expanded into more than 40 countries and over 170 cities worldwide, moving from 15 bookings in its first month to over 10,000 in its 12^th month in business.

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Founder and CEO, Mohamed Khaled, told AGBI the success of the company, which targets 20 percent month-on-month growth, has surpassed expectations. 

“As a founder you can visualise where you are at zero and as a billion-dollar company but not in between and how it feels every day. What we’ve achieved so far is beyond imagination,” he said.

Hotdesk’s platform includes desks, meeting rooms and private offices by the hour, day, month or year.

The company, which has grown from five employees to a team of 53, runs an asset-free model where it does not own or lease any of its workspaces, but consolidates the scattered market of empty commercial real estate on one platform.

Hosts range from co-working spaces, shared offices, hotel business centres and vacant furnished commercial office spaces.

The company’s initial seed funding round in September last year, which was led by Virtuzone, saw $1 million raised.

Khaled, who was previously involved as director of finance at transport startup Swvl revealed they were preparing to go to market to raise further capital.

“We are about to announce a currently undisclosed fundraise over the next couple of months, and we will be progressing into our Series A early in 2023,” he said.

He has also not ruled out a stock market listing.

“We believe that an IPO will be the best way of enabling our investors to get liquidity but also to enable Hotdesk to grow to what it needs to become,” he said.

According to a report by Next Move Consulting, the value to co-working spaces worldwide is forecast to grow from $7 billion in 2021 to reach $24 billion in 2030, a compound annual growth rate of 15 percent.

Demand for co-working spaces is on the rise in the Gulf as business communities nurture a new generation of startups driving a different way of working.

The popularity of co-working has been stoked, particularly in the UAE, by various initiatives to foster an entrepreneurial environment, including the introduction of a variety of visa residency programmes.

“Many trends came out of the Covid pandemic that later either continued or died. We think co-working spaces are here to stay,” Khaled said.

“They impact company’s bottom lines. Companies can be more efficient and leaner with real estate and can improve their ESG impact and cut their CO2 emissions by getting a leaner real estate portfolio. 

“People have also learned what it means to be flexible, and they do not want to let go of that.”

Earlier this week it was announced that Letswork, the Dubai-based subscription service and marketplace for on-demand workspaces, had raised a $2.1 million seed round.

It also revealed plans for a soft launch in Saudi capital Riyadh, bringing its total markets to five, along with Portugal, Spain and Bahrain.

This month also saw the launch of The Bureau Business Centre, the region’s first co-working space designed by women, for the UAE, which comes equipped with a pumping room for breastfeeding mothers. 

Rhea Patel, co-founder of The Bureau Business Centre, said: “Through our research and experience, we realised that a co-working space is far more than an office solution for many, including ourselves.”