Israeli flexible workspace co Mindspace raises $72m

Dan Zakai and Yotam Alroi Photo: David Garb

Mindspace today operates 32 branches in 17 cities in seven countries with total space of more than 100,000 square meters.

Israeli flexible workspace company Mindspace has announced the completion of a $72 million financing round led by Harel Insurance Investments and Financial Services Ltd., More Provident Funds, Shalom Meckenzie and Arkin Holdings, as well as by existing investors including Yoav Harlap, Kobi Rogovin and Globalworth. The latest funding will enable the company to expand in Europe, the US and Israel.

Mindspace was founded in 2014 by CEO Dan Zakai and chief of business development Yotam Alroy, The company opened its first branch on a 900-square meter floor in Beit Zion at 45 Rothschild Boulevard in Tel Aviv in May 2014, before shared workspaces giant WeWork began doing business in Israel.

Mindspace today operates 32 branches in 17 cities in seven countries with total space of more than 100,000 square meters. In the past year alone, Mindspace opened branches in London, Tel Aviv, Philadelphia and a new hub and spoke location north of Tel Aviv, at Yakum.

Mindspace serves a wide 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.

Zakai said, "Mindspace is experiencing an impressive growth momentum and high demand in all its locations. We successfully faced the many challenges of COVID. Today, our locations are almost at full occupancy and the current investment led by Harel Insurance and More Provident Funds is intended to fulfill the rising demand in the market and to launch new locations in partnership with landlords worldwide."

He added, "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 a continued accelerated growth in 2022, while creating a great added value for our many customers."

Mindspace provides carefully designed offices, lounges, fully equipped kitchens and meeting rooms, in addition to its unique community of leading entrepreneurs, business professionals and established companies. Mindspace allows for greater flexibility, shorter term commitments and lower financial risk, which is the most suitable solution in times of economic slowdown. These benefits explain the global increase in demand for flexible offices and the many supportive forecasts of industry analysts.

In 2021, Mindspace demonstrated a significant recovery when it 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 has signed six management agreements with landlords in Europe, Israel and the US, including for its recent launches in Israel and Philadelphia.

In March 2021, Mindspace launched "Hybrid", a new array of on-demand office solutions for companies and individuals who work under a hybrid model, combining work from home and in-office.

Harel Insurance Investments and Financial Services deputy CEO and CIO Sami Babkov said, "This investment is an expression of confidence in the flexible workspace model, against the backdrop of COVID’s impact on the office market, and shows confidence in Mindspace’s experienced and professional management team. Through this investment we’re able to diversify and improve our investments in real estate and faithfully serve the customers utilizing Harel’s investment department.

Published by Globes, Israel business news - en.globes.co.il - on November 24, 2021.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2021.

Dan Zakai and Yotam Alroi Photo: David Garb
Dan Zakai and Yotam Alroi Photo: David Garb
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