WORQ raises undisclosed pre-series B on back of profitability

By October 11, 2023

Internal round participation by 14 investors at an up-round with Phillip Capital the lead
Revenue growth of 80% in 2023 with industry leading net profit margins in the mid-teens

Stephanie Ping, co-founder and CEO of WORQ says that WORQ’s Space-As-A-Service model is a solution for businesses looking for scalability and flexibility when it come to office infrastructure challenges.
WORQ, Malaysia's leading coworking provider, announced an undisclosed pre-Series B funding amidst the backdrop of rising global interest rates and a slowdown in startup investments. Describing the round as an internal pre-Series B, 14 follow-on investors participated, signifying a vote of confidence in the startup that claimed revenue growth of 80% for its 2023 financial year that closed in Aug while maintaining mid-teen net profit margins.

Global asset management firm, Phillip Capital, headquartered in Singapore, led the round with its largest investment to-date, and its third consecutive into WORQ. The funding will be utilized for space expansion.

Preparations are underway for a Series B round with external investors in the near term.

Linus Lim, CEO of Phillip Capital Management Ltd said, "WORQ's adept cost management and efficient growth strategy positions them as a scalable and sustainable business model, capable of competing not just locally but also on a global scale. We value founders who can anticipate industry trends, and WORQ's team has undeniably demonstrated their strategic foresight, a quality that gives me confidence in their future success."

Rachel Leong, Director of Group Strategy and Operations at Mah Sing Group, who led this investment for the Leong family office, expressed her support. “With a customer-first approach, prudent financial management, and disciplined execution, we have full confidence that WORQ will continue its growth story in the coming years.”

Acting Group CEO of Cradle, Norman Vanhaecke said, “Cradle is behind WORQ all the way, as they are vital to the ecosystem for the growth of startups. Once companies receive funding, having a robust community of entrepreneurs to plug into is very important. To stay competitive in the world stage, it is imperative that we encourage the good work that WORQ is doing as they have a lot of positive spillover effects for the country,”

Commenting on its future prospects, Stephanie Ping, CEO and Co-founder of WORQ, highlighted the opportunities for Malaysia and WORQ as supply chains restructure to increase resilience. "Southeast Asia has become a prime location for many businesses looking to diversify and build their global supply chain. The Malaysian market is strategically positioned to capture these opportunities as we are a diverse, multilingual country with an educated talent pool and a robust SME supply chain.”

Where WORQ comes into the picture is to solve infrastructure issues which can be a significant hurdle for businesses looking to invest in a new market. She highlights WORQ’s Space-As-A-Service model as a solution.

“WORQ provides clients scalability and flexibility through its network of cloud offices. We have built a network of one-stop business centers that serve as vital infrastructure for foreign and local business formation in Malaysia. We see this as a foundational part of the cycle of job creation, upskilling and knowledge transfer.”

Currently on track to double its space under management by end 2023 and looking to triple this to 450,000 sq ft by 2025, WORQ’s customer profile has changed. In addition to its coworking clientele, which includes tech startups and SMEs, WORQ is experiencing increasing demand from global firms expanding into the region. Corporate clients now account for 70% of its demand compared to only 20% before the pandemic.

According to JLL Research, the current market penetration for flexible offices in Kuala Lumpur is around 1%, compared to the regional average of 3%. JLL predicts that the demand for flexible office solutions will increase the penetration rate to 30% by 2030, signifying substantial room for growth.

Recognizing this trend, several landlords and REITs are partnering with WORQ to provide these solutions to their buildings, gaining a competitive edge in attracting additional tenants and subsequently boosting rental yields.

WORQ sees opportunity to become the best Space-As-A-Service provider with the widest office network in Malaysia. The company aims to become the ‘Amazon of office spaces’ by providing scalability to office users, similar to that of Amazon Web Services in cloud computing.

It has plans to expand its space under management to 3 million sq ft by 2030. To date, WORQ has incubated 300 startups and 100 tech companies with plans to enable over 10,000 workers by 2025.