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A new report by CRE Matrix and Colliers states that startups in India currently occupy 10 percent of office space. This is grown from just 4 percent in 2017 and is expected to hit 13 percent by 2024.

The report partially attributes this to the burst of unicorns in the country since the pandemic hit. In just two months of 2022, we have already seen nine unicorns, including companies like the well known D2C brand MamaEarth, crypto giant Polygon and ecommerce platform DealShare.

The report states that despite the pandemic, office leasing rebounded in 2021. Even early stage startups seem to prefer centralised offices where their employees can all easily commute via public transport.

The report predicts that future growth in the space will come from the five industries of Fintech, Logistics, Edtech, Foodtech and Healthtech. Interestingly, the report also discusses how the combination of increased startup funding and the pandemic has led to growth of leased office space in cities beyond the traditional startup hubs of Bengaluru, Delhi-NCR and Hyderabad.

In the period 2019-2021, Pune had 9 percent of the startup office space leasing, while Chennai had another 4 percent. However, these are still consider startup hubs to an extent.

Interestingly, the emerging hubs in cities like Ahmedabad, Coimbatore, Jaipur, Goa and Kolkata have seen growing startups due to talent availability, deeper Internet penetration and lower costs of living.

According to the report, more than 820 startups have been funded in these emerging hubs, constituting nearly 40 percent of all startups in India.

This has led to the report’s authors foreseeing the “creation of a whole new ecosystem in non metro cities.” They calculate that non metro startups have raised $620 million during 2020 and 2021.

Due to lower costs, distributed workforces enforced by the pandemic, expansion among larger startups, local business opportunities and a more decentralised skilled workforce, the report expects to see a growing share of flexible office space leasing by startups in these non metro cities.