Last month we announced that Techworld was going to be investigating Tech City’s expanding co-working scene through a new series called Tech City Spaces. Central Working was our first stop but today we’re happy to bring you the second review in the series.
Innovation Warehouse is a selective co-working accelerator for start-ups that want desks and maybe even a little bit of financial backing at the same time. The Farrindgon-based space is situated above London’s Grade II-listed Smithfield meat market and home to roughly 50 digital start-ups.
The space has a slightly different ethos to uber-cool Central Working, which spent £500,000 on the interior of its Shoreditch campus.
Israeli founder Ami Shpiro told Techworld that he would have used the £500,000 invest in start-ups.
“I’d spend £50,000 doing the space up and £450,000 on investing in start-ups,” he added, before pointing out a second hand designer chair next to his desk that he’d acquired at a knock off price from a start-up moving out of their trendy offices near Piccadilly.
However, decisions like this have left Innovation Warehouse’s ten thousand square foot space in a state of confusion with old, tatty wooden furniture contrasting with modern leather seats.
“I would not spend money on furniture because our raison d'être is not co-working space,” said Shpiro. “We simply want to look at start-ups, get to know them, be in a community with them, invest in some and help the others.
So far Innovation Warehouse has invested in 11 of the 200 companies that have passed through its doors since the organisation opened in June 2011. A further 65 have received investment from other venture capitalists and angel investors that are invited in.
Companies that Innovation Warehouse is hoping to cash in on include personal shopping application HipSnip and enterprise social media management platform Comufy. Shpiro said it was too early to say how well his investments were doing.
The current investment pot stands at £1.5 million, with one-third allocated for seed funding and the other two thirds going towards financing – something that Shpiro claims many start-ups would struggle to get from their local bank.
The former Israeli soldier said he will invest the £1.5 million in five to six companies over the next 12 months and revealed that he has already selected the first start-up to invest in.
Companies looking to tap into this funding pot first of all have to satisfy Innovation Warehouse that they are worth letting in.
Shpiro said he advises roughly half of the start-ups that come looking for space to get more experience and look somewhere else, be that downstairs in Google Campus or on a Start-up Weekend.
“We want companies that have already got a bit of traction,” he said. “They’ve already raised £50,000, £75,000 or £100,000. We’re the hundred thousand pound to £1 million investment cycle. An exit for us would be raising £750,000 to £1 million.”
Once they’re in, Shpiro wants to see them working hard so he can maximise the chances of getting a return on his investment. “In here it’s very serious,” he said. “It’s tough. Really, really tough.”
“If you’re running a co-working space you have to see yourself as the CEO. If I wanted to get bums on seats and as much traffic as possible then I’d do it differently. But if I want to get my return through the growth of companies then I need to think of everyone in that space as being my employee.”
Those that do manage to penetrate the selection process will find themselves based in a great location, where office space typically costs £20 per square foot.
Shpiro said Innovation Warehouse is slap bang in the middle of the Shoreditch start-up scene and the Mayfair venture capitalists. “We’re one stop from King’s Cross, a couple from Liverpool Street and a couple from London Bridge. “You’ve got all the tube lines underneath,” he said.
“It was a bit sleepy when we first started here but the prices have gone up in the area in the couple of years since we moved in. I hope we won’t be replaced by a law firm or something like that,” he said.
Innovation Warehouse opened a smaller three thousand square foot hub in Portsmouth this April, which aims to bring in “bright young stars” coming out of university with interesting ideas and start-ups.
“The situation in Portsmouth is completely different,” said Shpiro. “Here we’re in London, its huge and there’s so much going on. Over there they don’t really have an entrepreneurial ecosystem but we chose Portsmouth because of the angel investors over there. They saw what we were doing and really liked it.”
The founder said he also has his eye on New York, Berlin and Barcelona but for now there are no serious expansion plans in place.
First impressions: quiet, productive, slightly dated
Hot desks are for people who are starting to work on their own idea and want to be surrounded by inspiring start-ups or for early state start-ups that need a professional place for business development. Prices are £100 + VAT per person per month for 10 days or less a month or £150 + VAT per person per month for more than 10 days a month
Fixed desks are for established start-ups with up to 12 people and range from £235 + VAT per month to £295 + VAT per month based on the number of people in the company
Aimed at: digital start-ups with investment potential
Internet speed: 86Mbps
Location: 1 East Poultry Avenue, Farringdon, EC1A 9PT. 19 minutes walk from Silicon Roundabout
Capacity: 12 per company
How it could be improved: consistency in appearance
What the punters say
Felipe Ribeiro - Founder SpottinStyle (hot desks)
Venu Tammabatula – CEO Gamar Ltd (fixed desks)
What made you choose Innovation Warehouse?
Felipe: The space has an amazing location in Farringdon, which is extremely central, and at the same time super close to the tech hubs for events. The space is quiet enough so everyone can focus on their work effectively which is really important for me. They’re constantly making the space better with things like new furniture. I come here 6-7 days a week so another good thing is that it’s open 24/7.
Venu: I visited all the places. Central Working, Campus, Cube, Club Workspace. The one thing I really liked with this place is it’s quite open and it’s more focused in IT companies and the people are much cooler. They give you 24/7 access so I practically live here. I come in at 8am and sometimes leave at 4am. Plus Saturday and Sunday.
How could it be improved?
Venu: They have plans to make this incubator. At the moment nearly anyone can join and start working but they could look at what start-ups need a bit more.
How long do you plan to stay?
Felipe: There is a limit of 8-10 people. When you get to this size you are almost invited to leave the place. We are launching next month and there is a really extensive growth so soon we will need 20 people. I hope they will let us stay!
Venu: I was in hot desking for almost eight months but we recently moved into the Hive and took permanent desks. Unless we increase our headcount to 12 or more we’ll be here. So probably another year.
What do you think of the pricing?
Felipe: It’s amazing. I’ve seen the more trendy spaces that are supposed to be the best but when you arrive there are just so many people and you don’t get the same help as in a place like here. They’re four times the price of here for somewhere in a similar location.
Venu: It’s more cheaper compared to everyone elses. They have different pricing formats but when you go to full time it’s much cheaper. We don’t have to worry about corporation tax and utilities. We can just start working.