Innovations are often brought about by introducing a new use of resources you already hold. Uber and Careem introduced shared use of cars earlier limited to the owner. Shared usage of real estate gave rise to Airbnb lodging for vacation rentals and tourism activities.
The founders of COLABS explore real estate as a co-working space. The leading co-work space of Pakistan, raising huge funding of $3 million last week, validates the need for such a space for the modern work ecosystem.
Among many co-working spaces operating in Lahore, what is it that enables COLABS to raise humungous funding round despite strong competitors? COLABS does not limit to providing a co-working space, the startup announced a SaaS product to enable businesses to meet back-office needs. Let’s discover what COLABS is and how it plans to transform the co-working ecosystem with a new product.
What is COLABS?
COLABS visions to redefine the future of work in Pakistan. It is Pakistan’s fastest growing flexible workspace, thoughtfully designed to enable people and businesses to grow. The key goal is to inspire collaboration, productivity and innovation through a community and network.
“The idea for Colabs is to create spaces across the country, where we can service freelancers, startups, SMEs and large enterprises. It is a community for anyone who wants to start up their career or a company or wants to enter the country. Colabs will support them in their journey. We want to become that gateway into Pakistan,”
~ Omar Shah, co-founder and CEO of COLABS
Background of the team
COLABS is the brainchild of the twin brothers Omar Shah and Ali Shah who bring their individual expertise in investment banking and construction respectively to develop an innovative solution with a co-working space.
Omar Shah – Co-founder and CEO
After completing his bachelor’s in economics from the University of London, Omar started his career in equities at Berenberg bank. Soon he moved to the position of associate director at Abraaj Group, a Private Equity and Venture Capital firm.
He has been an angel investor in early-stage high-growth Pakistani companies. Omar Shah is an investor and a board member in Patari, Pakistan’s leading music streaming app. He is also a board member of his family business of real estate development with interests in textile, agriculture, housing and sand mining.
Despite 12 years of living abroad and a highly accomplished career as an investor, Patriotism brought him back to Pakistan. As Shah shared in an interview with Drivedea, his decision to move back to Pakistan was followed by a work burnout. It made him realize that if he were to work this hard he would prefer to channel his efforts to something that would benefit the country.
Ali Shah – Co-founder and Director
Ali is a University College London graduate who later joined the long-established family-run real estate and development firm. SABCON is focused on high-end real estate development diversified with interests in real estate, project management services, technology, agriculture and sand mining. Ali currently operates as the CEO of SABCON.
The company has integrated verticals in financing, design, planning and build-out leading real estate projects in Pakistan. The COLABS spaces are also developed by SABCON.
Fatima Mazhar – Chief Operating Officer
Fatima has extensive corporate experience with many renowned companies. She worked with Careem for around 5 years, being an integral part of the launch of Careem in different countries and cities as the Head of Expansion. She then did her MBA from MIT and came back to join KeepTruckin as General Manager.
She then launched a startup by the name dukaan.pk with Monis Rahman. However, within 4 months she left it to join COLABS in June 2021 as the COO. Currently, she also serves as the Advisory board member of Jiye Technologies which recently launched an agri-tech BNPL feature.
Though the origins of co-working spaces date back to 1995, it is only now that they’re getting popular in Pakistan. Some co-working spaces were operating in Pakistan for long but none worthy of any news. Last year, the co-working ecosystem gained momentum and this year daftarkhwan and COLABS raised funding.
What changed in these years that sparked the interest and inclination of people towards co-working spaces? The pandemic hastened the development in many sectors including co-work spaces.
As the pandemic hit, the offices that could move remote did and the results were great for them. Those that could not, had to bear the flared up real estate and office running expenses. In these circumstances, co-work spaces brought a solution for both categories.
To raise productivity
Work-from-home did turn out cost-efficient for companies but now as the pandemic ends and people are going out socializing, the productivity level once experienced through work from home won’t last long. The distractions are open and managing without a set working space and hours would become difficult to manage for most.
Remote work infrastructure
The trend of freelancing and remote work for international companies is increasing in Pakistan primarily among the middle class. However, given the economic condition of Pakistan’s mass population, our homes are not suitable for work. Multiple people living together, no separate rooms, unstable internet, make it difficult to do full-time jobs from home. In such circumstances, a co-working space with flexible subscriptions and hours addresses the needs of this group.
Solution for Relocations
When a company hires talent from across the country, it needs to get it relocated and cover the expense of its residence and travel. If such companies collaborate with co-working spaces operating in cities where they wish to hire a team and let the co-working space host some of their members it would save expenses. This would also be good for individuals that wish to work without of station companies but can’t move.
As startups like Bazaar, Careem, Airlift, Bykea expand to smaller cities with an aim to cover Pakistan completely, it is impossible for them to build offices in each and every city. A co-working space could help them operate in every city without renting offices everywhere, thus facilitating expansion.
What does COLABS offer?
A great startup is initially just an idea, how you execute that idea decides what it becomes. Bad execution could send even the greatest of business ideas to fail. COLABS facilitates all the needs of a startup from idea to execution. COLABS primarily offers three things:
- Physical Space
- Community and Network
- Co-Beyond – SaaS product to solve business problems
The most basic facility that COLABS offers is a cost-efficient physical space to save members from real-estate rents.
As COLABS aims to be a gateway into Pakistan, it offers office services of a quality that an international company would require if they wish to operate in Pakistan. A well-managed office space that offers power, backup power in case of electricity blackout, kitchen services, relaxing lounges and activities, event space, workshops, socializing opportunities to name a few.
Community and Network
The most important feature that sets COLABS apart from all its competitors in the closely-knit community. The reason COLABS is a co-working space and not separately managed office setups that companies could rent is to encourage communication among the leadership of diverse startups and companies.
The fact that Fatima Mazhar came to COLABS seeking office space, and the communication led her to take up the position of COO at COLABS validates the opportunities communication brings. Fatima shared in a podcast at thought behind things, that they host office space for most of the emerging fintech in Pakistan. Having them collaborate could bring transformational innovations to the fintech ecosystem.
Co-Beyond – SaaS product to solve business problems
COLABS now provides a one-stop business solution to its community of COLABS members. Co-Beyond is a one-stop source of HR, Marketing Legal and Financial solutions that serve as an extension of COLABS’ core business services.
This service would include company registration, talent sourcing and management, payroll processing, and legal and tax compliance. The service is currently in beta phase and the company expands the team to launch the SaaS workspace business service.
“We realized that people setting up operations in Pakistan need other services; they need help to set up companies, process payrolls and to ensure tax compliance. That is why we introduced our business solutions. Our plan is to get to 600 paying customers in the next 12 months, and from there we will roll this product out to the market.”
~ Omar Shah, co-founder and CEO of COLABS
Funding raised by COLABS
COLABS raised $3 million in a Seed round
COLABS announced raising $3 million in Seed funding led by Indus Valley Capital, Zayn Capital and Fatima Gobi Ventures. Other investors involved in the financing round include Shorooq Partners, Kinnow Capital, Muir Capital, Sai Ventures, and some key angels, including Turner Novak, William Hockey, and Teddy Himler.
This investment marked the first time these three renowned Pakistan-based Venture Capitalists have collaborated. COLABS’ new funding brings the total amount raised by the startup to $4 million, including capital from an unannounced pre-seed round back in 2019.
The amount is raised for the business product launched by COLABS that would enable businesses to meet back-office needs. This product would be available to all COLAB members to assist them in their business proceedings. The company also plans to later extend the product services to third parties outside their community.
“With the capital we have raised from leading investors today, we’re now looking to turn our offerings into software-based solutions and productise services that could also be extended to people and institutions outside of our network, in addition to bringing on world-class talent to our existing team of rockstars. With this investment, COLABS aims to knit together a community of 100,000 entrepreneurs and freelancers in Pakistan, starting with 10,000 members within the next two years.”
~ Press release by COLABS post fundraise announcement
Future for COLABS
COLABS would channel the prospects of the recent investment to expand in the major cities of Islamabad and Karachi along with increasing their branches in Lahore. The broader vision of the team is to expand its footprint in every city in Pakistan thus facilitating the expansion of startups all across Pakistan.
As more and more people enter the startup ecosystem and more sectors other than fintech and retail are explored, the need for co-working spaces would further increase. The business model of COLABS would sustain and generate revenue in the coming years as now it not only solves workspace issues but business problems as well.