Smartworks to manage Zepto's new Bengaluru headquarters

Also Read | Zepto to file IPO draft papers by March-April as it transitions to marketplace model

The startup, which is shifting base from Mumbai, is expected to move into its new office in April. Zepto was also in talks with operators such as WeWork India, IndiQube and Awfis, before finalizing the transaction with Smartworks, the people cited earlier said on the condition of anonymity.

Last year, Zepto had signed a lease agreement for a 209,588 sq. ft commercial space in Bengaluru's Sarjapur Road. As the operator, Smartworks will design, build, operate and manage Zepto's new workspace, which was earlier a shopping centre named ‘Total Mall’. It will also manage a dark store or warehouse of Zepto on the ground floor of the office building.

Also Read | Zepto to become profitable in FY26, hopeful for IPO plans next year: CEO Aadit Palicha

Mint had reported last October that Zepto is planning to appoint a managed workspace operator for its new headquarters. 

“The management contract has a five-year tenure, including a two-year lock-in period," said the first person. 

Zepto and Smartworks didn't respond to Mint's queries.

Zepto has over 2,000 employees and plans to double its workforce in the coming year, said the second person. Its new office facility can accommodate 3,500-4,000 seats.

Also Read | Zepto’s FY24 revenue doubles to ₹4,454 crore in its first year as unicorn

Bengaluru dominates office space absorption

Bengaluru dominated office space absorption in 2024, a year that witnessed a historic high of 79 million sq. ft in leasing across nine cities, as per estimates by property advisory CBRE India.

The share of flexible workspaces in India's overall commercial office market is also growing, with rising demand from homegrown and global firms for modern office spaces. Last year, flexible space operators accounted for 19% of the total leasing activity, the CBRE report said.

The flexible workspace model offers both co-working spaces and managed office solutions or customised workspaces for specific companies. The Zepto-Smartworks contract falls into the second category.

Smartworks in December received the approval from Securities and Exchange Board of India (Sebi) for an initial public offering (IPO). It plans to raise funds through a fresh equity issue worth ₹550 crore along with an offer for sale. As of March 2024, Smartworks was operational in 13 Indian cities, with a portfolio of 41 centres spanning 8 million sq. ft. 

“Smartworks has been steadily growing its managed and serviced workspace portfolio, to cater to enterprises. The contract with Zepto is in line with its business strategy," said the second person.

Meanwhile, Zepto, which promises to deliver anything from grocery to cosmetics within about 10 minutes, is also expected to file the draft papers for an IPO this year. In August, it secured financing of $340 million led by US-based venture capital firm General Catalyst, at a valuation of $5 billion. It had gained its unicorn status in 2023, when it raised $200 million at a valuation of $1.4 billion.