Flex office provider Mindspace secured a funding of $72 million. The investment round is intended to support the continuation of the company's growth and its further expansion in Europe, the United States and Israel. The round was led by Harel Insurance Investments and Financial Services Ltd., More Provident Funds, Arkin Holdings and existing investors. Existing investors include Yoav Harlap, Kobi Rogovin and Globalworth.
Mindspace, founded in 2014 by Dan Zakai and Yotam Alroy, currently operates 32 branches in 17 cities in 7 countries, spread over 100,000 sqm. In the past year alone, Mindspace successfully launched new branches in London, Tel Aviv, Philadelphia and a new hub and spoke location outside Tel Aviv, at Yakum. Mindspace serves a wide range and variety of companies; about 41% are large enterprises and corporations and 38% are small and medium-sized companies. The leading industry types of its customer base are technology companies, financial companies and service providers. Past and present customers include Microsoft, Samsung, Playtika, Taboola, Yahoo!, Expedia, GoPro, and more.
While most of the commercial real estate industry took a hit as a result of COVID, the flex market continued to grow. All forecasts predict the accelerated growth of the flex industry to reach a market share of more than 30% by 2030; the current market share of flex as part of commercial real estate is 5%. According to a recent study by CBRE, in two years 43% of occupiers will have 10-50% of their portfolio dedicated to flex. In addition, 17% of occupiers will have more than 50% of their portfolio dedicated to flex.
“Mindspace isn’t just another real estate company that rents out offices, but rather offers a strong, strategic partnership to its customers and to landlords. When choosing their office environment, we found that our customers put a great emphasis on their experience: central location, unique design and service of the highest standard. We expect continued accelerated growth in 2022 while creating a great added value for our many customers,” Dan Zakai, CEO and Co-founder of Mindspace said.
In 2021, Mindspace reached the pre-COVID occupancy levels of early 2020 and even exceeded them with over 95% occupancy in Israel and Germany. The high occupancy levels are not the result of lowered prices as Mindspace maintained its pre-pandemic prices.
In the past two years, Mindspace signed six management agreements with landlords in Europe, Israel and the U.S. A management agreement is a model that is gaining both momentum and recognition worldwide, inspired by the hotel industry. This concept presents a partnership between the landlord and the flex operator, allowing increased profitability and greater flexibility for the landlord while providing a relevant response to today’s market landscape.
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