In a nondescript building in Lahore, Omar Shah pulls up a spreadsheet that tells two stories. The first column shows Pakistan’s co-working revenue per seat: Rs.30,000-40,000, largely unchanged for three years. The second shows Saudi Arabia: $1,500 per seat. “Cost is 5x but revenue is 10x,” he says, with great confidence and pride in his eyes, during a conversation with Profit.
They are not expanding to Saudi Arabia. They are graduating.
If you go back to January 2025, the situation looked extremely bleak. Pakistani startups raised $42.5 million all year, less than what some companies raised in a single round three years ago. Co-working spaces were bleeding customers. The average lifespan of a co-working space in Pakistan has been around two years. Contrary to that, COLABS claims it has been profitable for more than three. Now, in Q1 2026, COLABS will open its flagship Riyadh location with Shorooq Partners and Waseel Investment backing. The same week, another Pakistani co-working space will likely shut down.
The graveyard shift
Pakistan has 449 co-working spaces. Most are ghosts.
When 3G and 4G launched in 2014-2015, Pakistan was supposed to be the next frontier. The narrative was intoxicating: 220 million people, a median age of 22, thousands of freelancers joining global platforms, and a nascent startup ecosystem ready to explode. By 2016, the pioneers moved in. Kickstart, founded by LUMS alumni. Daftarkhwan, backed by entrepreneurs wanting to bring Silicon Valley culture to South Asia. The Hive, bootstrapped from a single Islamabad location.
They all thought they’d be the WeWork of Pakistan. They were copying the wrong playbook.
While Pakistani operators were raising their first rounds, Adam Neumann was burning through $47 billion in valuation. WeWork had become Silicon Valley’s darling, promising to “elevate the world’s consciousness” one desk at a time. The company expanded to 600 locations worldwide, hosting 600,000 members. But beneath the kombucha taps lay a fundamental problem: co-working’s real issue isn’t just burning money, it’s depending on a customer base that could disappear overnight.
WeWork’s 2019 implosion should have been a warning. The IPO prospectus revealed staggering losses, questionable governance with Neumann’s supervoting shares, and bizarre self-dealing including Neumann selling the “We” trademark to his own company for $5.9 million. The valuation crashed from $47 billion to under $10 billion. Neumann was ousted.
Pakistani operators dismissed it as American excess. By 2021, it seemed they were right. Pakistan’s startup ecosystem was flying high with $352 million in funding. International VCs were circling. Co-working spaces expanded aggressively. Daftarkhwan grew from 5 to 9 locations. Kickstart reached 10. Everyone was betting on startups.
Then came the winter.
When the music stopped
The unraveling began in Q4 2022. Global interest rates were rising. The free money era was ending. But in Pakistan, the pain would be particularly acute. Q4 2022 saw funding drop 78% year-over-year. The numbers tell a brutal story: 2022 brought $355 million but declining quarterly, 2023 saw only $74 million raised, a 79% collapse, and 2024 managed just $42.5 million.
Pakistan’s 79% funding decline far exceeded the global venture capital decrease of 38%. The casualties mounted like a startup massacre. Airlift, which had raised $85 million at a $275 million valuation, shut down abruptly. TAG, a fintech that raised $17.5 million, became embroiled in controversy. Jugnu collapsed. Medznmore gone. These weren’t just statistics, they were co-working spaces’ biggest potential customers.
The domino effect was swift. Pakistan’s political turmoil intensified with routine internet shutdowns during protests. Inflation hit 38% in May 2023. Interest rates soared to 22%. Co-working spaces faced a triple crisis: customer exodus as startups died or downsized, cost explosion with electricity bills doubling, and payment delays from even surviving startups.
Spaces that were 90% occupied in January could be 40% occupied by March. Operators were losing 60% of their business but still had to pay full rent to landlords. The math stopped working.
The pivot
“In 2022, we had a choice,” Omar Shah recalls. “Chase dying startups for Rs.30,000 per seat, or pivot completely.”
While competitors doubled down on distressed startups with ever-deeper discounts, COLABS made a counterintuitive move: they went upmarket. The transformation required fundamentally rethinking what a co-working space could be in a country where startups were dying but enterprises were still operating.
In 2021, COLABS’s client base had a high number of startups. By 2024, enterprises led with 30-40%. “A startup might die tomorrow,” Shah explains. “Coca-Cola won’t. Ernst & Young won’t. These companies need space and flexibility.”
The real innovation was the business model. The old model was straightforward: lease space, fit it out, sublease to members, pray occupancy stayed high. It was the WeWork model, and it was broken. COLABS went to landlords with a different proposition, partnership, not tenancy. The landlord provides space and capital for fit-outs. COLABS provides operations, brand, technology, and members. Revenues and profits are shared.
For landlords, the math was compelling. Traditional lease yields in Pakistan commercial real estate run 7-8%. With the JV model, yields jump to 14-16%, effectively doubling returns. When markets are tough, both parties share the pain. While competitors bled cash regardless of occupancy, COLABS’s costs flexed with revenue.
COLABS stopped thinking of itself as a real estate company and became a business services platform. Payroll processing for companies navigating Pakistan’s complex reporting system. Investor introductions for scaling SMEs and startups. Legal services partnerships. “During COVID, we gave some clients 50% discounts,” Shah reveals. “Those companies are still with us, now paying full price and referring others.”
The network effect became COLABS’s real moat: 5,000 members across 300 companies, each one a potential customer, partner, or referral source. The proof of concept came from an unexpected source, the Pakistan Air Force. The NASTAP Lahore partnership brought military discipline to startup culture. “If we could make the Air Force a co-working partner, we could partner with anyone,” Shah says.
The 10X arbitrage
The math on Shah’s laptop seems almost too good to be true. Pakistan reality shows revenue per seat at $100-150 monthly, requiring a high occupancy for breakeven, with growth flat for three years. The Saudi opportunity presents revenue per seat at $1,000-1,500 monthly, needing only 35-40% occupancy for breakeven, with demand “through the roof” in a current market of 500 seats with potential for more than 10x.
“It’s not just price arbitrage,” Shah explains. “In Saudi, physical offices are mandatory for business licenses. Every new company needs an address. The demand isn’t speculative, it’s structural, built into the regulatory framework.”
International operators in the Saudi market charge $2,000+ per month for office space, targeting multinationals. Local players lack ecosystem experience. COLABS at $1,000-1,500 hits the sweet spot, affordable for SMEs, premium enough for quality. Add to it the subsidy structure. “Our Pakistan operations, profitable for many years, will subsidize Saudi overhead,” Shah reveals. “We already have the backend team, the platform, the playbooks. Saudi is pure margin expansion.”
While Pakistani operators fight over shrinking Rs.30,000 seats, COLABS moves to a market where the same product generates 10 times the revenue. Saudi’s Vision 2030 has created unprecedented demand. New business formation is at record highs. Women entering the workforce need professional spaces. International companies require flexible solutions.
The desert landing
Adam Neumann built WeWork into a $47 billion fantasy with supervoting shares, self-dealing property leases, and a $5.9 million payment to himself for the “We” trademark. What WeWork has taught many operators like shah is what not to do. No messianic founder worship. No growth at all costs. No 20-year leases for 2-year customers.
The lessons, as per shah, are embedded in COLABS’s DNA. Free cash flow has been their anchor. Ninety percent of COLABS’s revenue comes from 12-month contracts with 2-month deposits upfront. “We don’t sell vision. We sell desks with predictable payment terms.” They claim to have chosen profit over growth, which is why they survived Pakistan’s worst economic crisis.
Now, Q1 2026 approaches with ambitious but achievable targets: 30-40% occupancy from day one. In Pakistan, they’d need higher occupancy rates to survive. In Saudi, 40% means profit. The pipeline is already being built. Pakistani companies expanding to Saudi need familiar spaces. Saudi SMEs want COLABS’s price point. International firms seek alternatives to overpriced competitors.
The Vision 2030 tailwind is powerful. Saudi Arabia isn’t just diversifying its economy, it’s reimagining its business culture. COLABS isn’t just bringing desks; they’re bringing ecosystem expertise from a country that, despite challenges, built a vibrant startup culture from nothing. The risks are real, cultural navigation, competition from deep-pocketed locals, managing operations across 3,000 kilometers. Can Pakistani innovation translate to Saudi execution?
The last stand
COLABS’s Saudi expansion is more than a business story, it’s a template for how Pakistani companies can thrive despite their home market’s challenges. While Pakistan’s startup ecosystem craters with $42.5 million raised in 2024, a profitable company expands regionally, proving success is possible with the right model.
The template is clear: companies that survive Pakistan’s chaos can thrive anywhere. Venture capital is a luxury, not a necessity, COLABS raised just $5 million total. The same product generating $150 in Karachi generates $1,500 in Riyadh. COLABS’s 5,000 members across Pakistan will soon connect with Saudi members, creating a bridge for cross-border business beyond co-working.
In 2021, when Pakistani startups raised $352 million, everyone wanted to build co-working spaces. In 2024, COLABS is perhaps the only operator still building, just not in Pakistan. “Maybe that’s the lesson,” Shah reflects. “Sometimes the best way to serve your home market is to prove you can succeed beyond it.”
The last man standing in Pakistan’s co-working wars isn’t trying to win the war anymore. He’s moved to a different battlefield where the economics actually work.
“We didn’t survive Pakistan’s startup winter to die in Saudi’s desert,” Shah says. “We survived it to bloom there.”
The average Pakistani co-working space survives two years. COLABS is approaching six. The difference isn’t luck or timing or capital. The difference is recognizing when to stop fighting yesterday’s war and start winning tomorrow’s peace, even if that peace is 3,000 kilometers away, in a desert kingdom where Pakistani efficiency might just be the competitive advantage nobody saw coming.
And in a world where unicorns regularly turn into donkeys, being a profitable camel crossing from one desert to another might be a great success story.
