Mindspace raises $72 million to expand shared office offering

The Israeli company, founded in 2014 by Dan Zakai and Yotam Alroy, currently operates 32 branches in 17 cities in seven countries, spread over 100,000 square meters

Mindspace, an Israel-based provider of shared office space, announced on Wednesday a new funding round of $72 million. Calcalist has learned that the round was held at a $250 million company valuation. 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 Israeli institutional investors Harel Insurance Investments and Financial Services Ltd., More Provident Funds, Shalom Meckenzie and Arkin Holdings, as well as by existing investors: Yoav Harlap, Kobi Rogovin and Globalworth.

 

Mindspace, founded in 2014 by Dan Zakai and Yotam Alroy, currently operates 32 branches in 17 cities in seven countries, spread over 100,000 square meters (over 1 million sq ft). In the past year, 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.

Mindspace co-founders Dan Zakai and Yotam Alroy. Photo: David Garb

 

While most of the commercial real estate industry took a hit as a result of the Covid-19 pandemic, the flex market continued to grow. 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.

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"Mindspace is experiencing an impressive growth momentum and high demand in all its locations", said Dan Zakai, CEO and Co-founder of Mindspace. “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.”