Lahore-based co-working startup Daftarkhwan plans to double the capacity at its co-working offices within a few months after securing seed funding from regional classifieds giant and the parent company of Zameen.com, the Emerging Markets Property Group (EMPG).
Daftarkhwan did not disclose the exact amount of funding raised but disclosed to Profit that it was a seven-figure amount raised from one investor. The only other investor in the company is Lahore-based Walled City Co., which invested in Daftarkhwan in 2018 and has earlier backed startups like Airlift, GrocerApp, and Tazah.
Founded in 2016 by Saad Idrees and Ahmad Habib, Daftarkhwan is one of the pioneers of the co-working movement in Pakistan. Since 2016, the startup says it has scaled to five locations in three cities, with the capacity to host 1,650 people each day. Daftarkhwan plans to scale it to over 3,000 people within the next three months.
Daftarkhwan’s new backer owns and operates brands such as Lamudi, OLX and Bayut besides Zameen in the property and classified spaces in Pakistan and the Middle East and reached unicorn status in 2020 after the merger with international classifieds giants OLX Group.
On why EMPG chose to back Daftarkhwan, Saad said that being in the real-estate segment itself, EMPG saw an interesting alliance that could bring synergy in the work that they do and in the work Daftarkhwan does.
“It is not totally unprecedented and in hindsight, it makes sense. We are looking at this as something that can mature into a very fruitful two-way relationship that will end up being solid and beneficial for both the parties in the deal,” Saad Idrees said.
No response was received from EMPG if Zameen or OLX would be listing co-working ads on their respective platforms in Pakistan. Saad hinted that many interesting directions can be taken after this partnership and the EMPG leadership was supportive and had given Daftarkhwan management a free hand in taking this forward according to their vision.
“Our sole focus right now is to continue doing what we are doing and do more of it,” Saad told Profit.
Post funding, the startup plans to scale its presence further in Lahore, Islamabad, and Rawalpindi with new locations, besides launching in smaller cities. Saad exuded confidence that co-working, especially after the pandemic, has proven to be an effective real-estate model. The market, therefore, is big enough to grow.
“Daftarkhwan has moved on from hosting startups only to legacy businesses housing their employees at our co-working spaces. So co-working is working now and working for everyone. It’s all about delivering the right type of experience and giving the flexibility of service that can cater to mature businesses and young businesses,” Saad told Profit.
“As long as you can do it in a viable way, you can do it for everyone on board,” he added. On the viability, Saad said since they are in a high growth mode, Daftarkhwan is not profitable but is on track to achieve profitability by Q4 2022.
Daftarkhwan’s funding announcement is the first one for a co-working startup in the last few years. Despite a flurry of investments in 2021, the year that is probably going to go down as the most storied year for Pakistan’s startups, no co-working startup announced raising any funding but remained enablers of the ecosystem, affording startups inexpensive offices.
Some of Daftarkhwan’s competitors in the space include Colabs, Popcorn Studios, Kickstart, and Hive. On how Daftarkhwan plans to compete, Saad said that the co-working space is big enough right now with room for everyone.
“I don’t feel this is a single-player market. Since these are early days, everyone is in the process of realising their unique niches and potential to cater to,” he said.
EMPG CEO Imran Ali Khan said in a statement that one of the key drivers of EMPG’s own success has been its investment in the right people above all else, and the team at the helm of Daftarkhwan are some of the most hard-working, ambitious and dedicated people in Pakistan’s startup ecosystem.