Kunal Sharma, Founder & CEO, Flipspaces – a tech-led commercial design and build leader, talks to Architecture + Design about their new innovations that make them extraordinary and their journey in the commercial design space
The pandemic has introduced numerous changes in the commercial interior design and build segment; how do you feel this has impacted the consumer sentiments?
The onset of the pandemic has evolved the work culture globally. With this, the commercial design segment is no longer limited to creating functional spaces, instead, it has imbibed a whole new aspirational essence wherein consumers are more demanding than before and look for innovative designs, high-end customizations and professional execution services. From mere workspace renovation to workplace transformation, the commercial interior design industry has transcended with heavy impetus on design aesthetics which is truly reflective of the brand ethos and organizational culture.
Before the outbreak of the pandemic, the office spaces were equipped with files, papers, printers, crowded workstations, etc. However, all that has been transformed into cloud storage and workstations have become paperless.
Considering the post-pandemic scenario, there has been a steady recovery in the demand from the commercial real estate industry. It further expedited the recovery of the commercial interior design segment as well, which is expected to touch an all-time high of a whopping $120 billion combined market size for India and the US by 2023.
We, at Flipspaces, took the period of pandemic as an opportunity to further our competitive moat through technology in order to create scale and a differentiated customer experience in design and build for commercial spaces in a post-pandemic world.
What are the new innovations being introduced by Flipspaces to stand out from the competitors?
As a tech-led commercial design and build leader, we have ticket-size that is 10X of other Interior Design startups like Livspace and Homelane, a market size 8X of these players, with India and US combined, and a more templatised product and delivery ecosystem. Further, we have kept focusing on our differentiation through tech-enablement in every vertical of business while keeping a sharp focus on profitability which has helped us tide through difficult times of COVID infused shut-down. We’re now poised for scale.
In Flipspaces, towards creating a distanced value proposition, we firmly believe in the power of technology to add disproportionate value to every stake-holder of the commercial real estate industry i.e. builders, broker, product and service suppliers, and end clients.
Additionally, our core tech suite combined with deep domain expertise has allowed us to launch and successfully grow our SAAS product, Vizstore, for Furniture and Furnishing suppliers. Vizstore allows product suppliers to create a digital twin of their physical store experience thereby reducing their cost of physical real estate and cataloguing. Armed with a digital tool kit, Vizstore enables Furniture and Furnishing brands and retailers to drive Omni-channel commerce with more reach and efficiency.
In that sense, Flipspaces is a unique market defining venture with a two pronged revenue model. The first being tech-led design and build and the second more recent one which comes from the parent tech-suite is the SAAS model being driven as Vizstore.
How technological advancements are disrupting the commercial design space? What are the technological integration adopted by you so far?
The rapid influx of new-age technologies such as smart building and modelling, augmented and virtual reality, etc. have streamlined and tailored the commercial design process. They are being used to create smarter commercial spaces while compensating for the decline in on-site construction productivity due to the outbreak of the pandemic.
Being a leading and tech-enabled player in the commercial design and build industry, we have found that the end-clients have largely had a broken experience with other stakeholders i.e. builders, brokers, product suppliers and contractors due to the lack of one consolidated tech suite which connects design visualization, product supply chain and execution management.
With VIZDOM, the proprietary tech-suite within Flipspaces, we are looking to create one integrated tech-suite which creates efficiency and customer delight in each step of the process from choosing their commercial space to moving into a design differentiated space.
How would you define your journey in the commercial design space?
Established in 2015, Flipspaces is renowned for its tech-oriented solutions in the commercial design and build industry. We have executed multiple projects to transform more than five million square feet of commercial spaces for renowned companies across corporates, start-ups, MNCs, retail brands, SMEs includingBSH, Nobroker, Openmoney, Aditya Birla, InstaOffice, Nivea, Oppo, P&G, Reebok, RoyalEnfield, Razorpay, NoBroker, Bounce, and PlaySimpleGames.
During the pandemic, while the entire country was under lockdown and businesses across vertical shad come to a standstill; we at Flipspaces adopted the “Pivot & Persist” outlook and launched two new initiatives.
In May 2020, we launched REBOOTSPACES, a line of products and services that focused on creating next-generation commercial spaces that were intuitive, empathetic,and safe, along with ergonomic workspaces to facilitate a seamless home office experience.
The second Design and Product Offshoring, was launched in mid-April 2020 and is avertical that delivers design-only services combined with product export from India for clients in the US. This experiment has been extremely successful with the unprecedented growth of 35X in the last 6 quarters and is now profitable at the EBITDA level.
Apart from these, another recent development is the launch of VIZSTORE, the first SAAS product for third-party furniture and furnishing brands and retailers which is seeing a fantastic response amongst furniture and furnishing brands, retailers andSMBs.
How do you plan to invest the recently raised funding?
We have raised a pre-series-B round of $2 Million from a consortium led by Prashasta Seth, Ex-CEO, IIFL AMC. The round also saw participation from family groups and HNIs. Further, we are also backed by Carpediem Capital, a growth-stage PE fund for mid-sized ventures. With recently raised funding, we plan to utilize the funds to drive our US vertical growth where we have already witnessed 25X growth in a year. On the other hand, our first 3rd party SAAS product from the stable meant for furniture and furnishing brands, retailers and SMBs has seen a fantastic initial response. We also plan to allocate the funds on its newly launched SAAS vertical.
What are your expansion plans?
Expansion plans for SAAS vertical – VIZSTORE, the SAAS offering for furniture and furnishing retailers is receiving a great response in the market. Our vision for VIZSTORE is to be the Virtual Twin for the physical showroom of the FNF brand or retailer. Powered by gamification and Virtual Reality, it allows customers to walk through the virtualized showroom environment and discover and visualize products as they would in a physical showroom experience. It allows FNF retailers and brands to cut on their cost of real estate for showcasing products and allows them to drive Omni-channel commerce through an unprecedented VR-enabled tech. It is a paid product from the outset for retailers, brands and manufacturers. Towards the same, we’re looking to expand on the tech-functionality and also increase outreach for the sales of the product. We are looking to take VIZSTORE to20K PAID customers by next year.
Expansion plans for DnB business – Buoyed by the inorganic growth in the US, we are looking to grow the US business 5X from H1 in the second half of this year. Expanding team and geographical outreach is the key to achieving these numbers while maintaining very strong margin profiles which are characteristic to the US business. The tech-enabled design and build market has been quick to spring back in Q2 this year after the second wave. We have $ 10 Million of design and build mandates at an empanelment level across India and US. 50% of our current business is still coming from repeat and referral clientele thus validating the strong customer love which brings in an inherent annuity to the design and build vertical.
How has the demand for commercial designing changed in the non-metro cities during the pandemic?
Commercial activities in tier 2 cities have seen a rise in recent years, driven by the general affordability, price stability, availability of options and as well as lower levels of competition for properties. Companies and investors who are now looking to invest in tier-II commercial real estate for their expansion can now benefit by contributing to the economic growth of these centers.
Especially the IT companies which contribute about 40% of office lessees in tier I and II cities in India, recognized that employees primarily from the tier-II cities faced challenges of bandwidth, internet connectivity and the physical impossibility of incorporating a work area at home over a longer period. Many organizations are now progressively looking at tying up with co-working spaces or setting up serviced office spaces for such employees.
The leasing activities in 2021 is expected to be majorly driven by sectors like technology and IT companies which have back offices involved in finance, healthcare, e-commerce, logistics and entertainment. BFSI companies followed by IT_BPO companies are amongst others that may be significant demand drivers and the main occupiers of large office space for operations. MNCs and many large Indian companies are now actively looking at options for leasing managed offices that provide them with the best layouts, fit outs, and services to support their business activities.