Proptech firm Essensys targets global expansion

As all industry eyes watch WeWork and the troubled co-working company’s expected refinancing, the founder of a tech firm serving office space providers is adamant that the flexible revolution is here to stay whatever happens to its once-posterchild – and is planning an international push to capitalise. “What we are seeing from the biggest global occupiers is that they are now seeing flexibility as the demand default,” says Mark Furness, chief executive of Essensys, which makes software that helps operators of co-working and flexible offices manage IT across their portfolios. “They don’t want the onerous, financially burdensome, long-term commitments of old… The world’s biggest global real estate players, landlords, REITs and funds are all turning to face the opportunity. They are all developing and delivering their own answers to how they support the demand from their occupiers for more flexibility, more service-led environments, more amenity-based spaces. We are at the very early stages of its adoption curve.” [caption id="attachment_1003322" align="aligncenter" width="847"] Mark Furness[/caption] Set up in 2006, Essensys has just published its first set of results since listing on the London Stock Exchange’s junior AIM market in May. Over the year to 31 July, revenues surged by more than a quarter to reach £20.6m. Adjusted earnings before interest, tax, depreciation and amortisation jumped by almost a third to £4.2m, although costs linked to the initial public offering pushed the company to a loss of £1.4m. If the IPO costs are stripped out, profit stood at £1.1m. The company has established operations in the UK and US, with clients including Uncommon, Biz Space and The Argyll Club (formerly known as London Executive Offices). During the past year it has also moved into mainland Europe with an opening in Germany. Now, Furness and colleagues are looking further afield. “If we are thinking emerging markets, the obvious market will be APAC,” the chief executive says. “All forecasts point to, in 2021, the Asia Pacific market being the biggest global market for flexible workspace. It would seem sensible that we have a plan for that market in the near-term, and we are in the early stages of developing that. We proved with our entry to the US we like to be meticulous, forensic in our approach to market entry.” Furness expects the company to “firm up” plans for an Asian business early next year, with “hopefully 12 months from there having customers delivering revenue, and probably having feet on the street too”. Bootstrapped business The London listing has opened up new ways for Essensys to propel itself to the next level, Furness says. “We have bootstrapped the business the whole way to IPO, so we are very efficient with our use of capital,” Furness says. “What we have done with the IPO is make sure we are equipped for the immediate future… As we sit here today, we are debt free, [with a] strong cash position. In the future, should we need to [raise new funding] and should we think it’s the right answer, then the equity markets, via our listing, is the right place to look.” The co-working space is not short of ambitious executives, and so Furness’s plans for Essensys are as big as you might expect. “My ambition is really clear for the business – to be the dominant technology platform that powers the flexible workspace revolution,” he says. “It’s pretty ambitious but it’s really clear, and from where we sit today, it’s pretty achievable.” But the chief executive is also aware that new questions are now being asked about the business model of many flexible workspace firms. So what does he think of developments at WeWork, which has pulled its own IPO and seen its founder, Adam Neumann, step back from his chief executive post? Essensys has no links to the New York-based company, but Furness describes the attention the co-working market has gained from its growth as “really good for the industry”. “WeWork is an outlier in terms of its business model, its funding and how it has approached growth,” he adds. “But actually it has been a catalyst. It has really shone a light on the sector, so for that we should all be really grateful.” To send feedback, e-mail tim.burke@egi.co.uk or tweet @_tim_burke or @estatesgazette