Karachi-based co-working space firm, Kickstart, has successfully raised Rs200 million from Vital Group, facilitating the startup’s expansion in central Karachi. The co-working spaces offer individuals from various companies shared offices with flexible seating options and shared facilities like boardrooms, lounges, and kitchens.
Founded in 2016 by LUMS alumni Saad Riaz, Khawaja Raza, and Hassan Shahid, Kickstart has been a pioneer in collaborative workspaces in Pakistan. The recent partnership will allow Kickstart to double its area in Karachi to over 80,000 square feet, expanding its total coverage to 200,000-plus square feet across 14 locations after the expansion.
Kickstart has introduced a new business model where it acts as a property manager for landlords, operating on a revenue-sharing basis. This innovative approach aims to enhance rental yields on commercial real estate, potentially reaching 8-9%, thus reducing the payback period significantly.
The move aligns with the global trend of the rising popularity of co-working spaces. In India, such spaces have witnessed substantial growth, reaching 680,000 seats and 43.4 million square feet by June 2022. This figure is expected to rise further, reaching 1,025,000 seats occupying 75 million square feet by 2025.
Despite financial challenges in Pakistan’s startup ecosystem, Kickstart’s successful fundraising reflects its resilience and strategic expansion plans. The funding landscape for local startups has faced difficulties, with several well-funded startups closing down or scaling back operations. In the first nine months of 2023, Pakistani startups raised only $35.1 million, marking an 89.4% YoY decline. The fintech segment dominated investments, followed by transport and logistics and edtech. The number of deals in the same period decreased to 21, down two-thirds from the previous year.
