Space-as-a-Service: The Startups Shaping This Trend

By Simon Abboud & Tyrone Furer Published on Dec. 15, 2020

Space-as-a-Service (SPaaS) as a concept has evolved over the past couple of decades, from on-demand working and residential spaces, with companies such as WeWork and Airbnb, to a more open initiative which required an alignment and trust between landlords (or space owners), and tenants (or space seekers). The core services that it offers are leasing flexibility and cohabitation with other companies, which occasionally are direct competitors, but also a unique opportunity to brainstorm and network in a novel way.

We have been seeing that those shareable spaces, which used to be indoor and directly related to human usable areas, now also can offer new use-cases. We are also noticing an evolution in the business models around space-sharing - from renting and operating a space to subletting it as a co-working or co-living space. On top of that, there are new entrants in the market that provide digital platforms for any individual or established business to monetize, at a neighborhood level, their unused space at home or at the workplace. The ease of accessibility to become a space operator thanks to those Customer-to-Customer platforms are unleashing an evolution in the type of spaces available now on the market anywhere from warehouses and living spaces to curbsides and gardens.

space as a service market map

In this article, we will be focusing on 5 different Space-as-a-Service applications:

  • First, we will focus on the new ways commercial, work-focused spaces, are being traded on local markets.
  • Second, we will explore how those trends actually translate when applied to the living environment.
  • Third, we will dive into spinoff concepts found in the storage sector for different types of goods.
  • Fourth, with the rise of mobility infrastructure, we explore what some of the most exciting initiatives in this domain are.
  • Lastly, we'll look at a couple of solutions which are offering different types of well-being-focused applications.

Space-as-a-Service in Commercial Real Estate

The workplace is one real estate typology that has been constantly evolving over the past centuries. What are the current reasons to commute to a workplace, and what could those spaces look like?

The COVID-19 pandemic has abruptly questioned decades of corporate real estate and workplace design strategies by challenging the purpose of large centralized office spaces. The ongoing trend calls for a more distributed model throughout cities and larger metropolitan areas. This kind of a setup partially was already being adopted before the Covid-19 outbreak by some players, and today seems to be an even more viable approach to better support organizational resiliency while also improving the quality and efficiency of urban communities. This has undermined the necessity to own or rent a space for a long period of time, and rather focus on more flexible options using spaces for more purpose-based activities across several industries.

Here are a few interesting companies challenging the status quo and illustrating what our future of workplace could evolve into:

BeSpaced

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Let’s start with BeSpaced, which is an online marketplace for private and commercial short term locations for workshops, meetings, courses and social events. This marketplace also has an integrated transaction-based reservation, scheduling and booking system. If you need a suitable location to conduct a course, an offsite, or just a workspace that your typical coworking office next-door can’t provide, their marketplace could very well fit your needs.

Matagora

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When looking at how space-as-a-service is challenging the retail domain, we believe Matagora has something interesting to offer. In addition to providing the whole backend for online brands to market and manage their items, the company also offers a way to match you with existing local businesses. How is it different from the regular pop-up concept? It actually allows you as a brand to rent a shelf in an existing coffee shop, therefore, enabling you to create a seamless experience for the customers, as they would have to just scan a QR code and be redirected to Matagora online store to make a purchase. On the other hand, this is a unique new way to create an additional revenue stream for small businesses by renting their unused and underutilized space.

Freight Farms

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The current pandemic and the closing of borders earlier this year highlighted the need for a more localized economy. A startup trying to push this idea further on the AgTech side is Freight Farms. Their unique value proposition comes from their ability to propose already finished and autonomous enclosed spaces to be shipped and moved anywhere. For example, they are able to ship their product to business centers and large school campuses to provide on-demand fresh food-producing environments that bring space to the user.

Space-as-a-Service in Residential Real Estate

With commercial real estate landlords moving towards a more hospitality-focused model, we also see companies focusing on offering more amenities and unlocking new revenue streams by optimizing unused spaces. On the residential side of real estate, a similar trend that transforms underutilized spaces into a revenue-generating opportunity has been gaining traction. This is an idea that could become even more popular as the sharing economy is increasingly gaining traction in almost every industry.

Let's see some interesting startups in the landscape:

United Dwelling

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Other spaces which could be used more efficiently are our unused gardens and garages. United Dwelling has a very ambitious goal to turn the 300,000+ two-car garages or unutilized backyards throughout the city of Los Angeles into actual studios. With the support of local communities and public officials, they are tackling the shortage of affordable homes in one of the most expensive cities in the US.

Globeliving

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Another interesting concept is to share your home when you are not using it. Globeliving offers exactly that. Whether you are looking for a place to nap, host a date, or work, this booking platform will match you with a suitable apartment or hotel room which you will be able to book by the minute for stays less than 24 hours pushing the short-term rentals to the next level.

Childcarepoint

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In a world where it is becoming increasingly more difficult to find nurseries for children, a solution has emerged in the Bay Area. Transforming homes into actual child care units is the objective of the Childcarepoint ecosystem. They are offering professional caregivers, nannies, babysitters, and other types of professionals the opportunity to open a nursery in their own space. The process is facilitated by a mandatory training program and renting the necessary furniture and equipment directly through the company platform.

Space-as-a-Service in Mobility

Something like streets that have been dedicated solely to transportation services in the past could also benefit from a redesign. Historically modes of transportation have been prioritized when it comes to building cities and streets - from horses, carriages, and bicycles to motorcycles, cars, and buses. These vehicles also take up a lot of space when it comes to parking, further neglecting the needs (and additional opportunities) of pedestrians, urban dwellers and city visitors.

Parking lots are public spaces that have a huge impact on the design of our cities and suburbs. In the United States alone, it is estimated that there are three nonresidential parking spaces for every car. New ways of transportation also bring an additional need for extra parking. For example, micro-mobility vehicles such as e-scooters, electric skateboards, and bikes which have taken over our city streets, need a place to park. However, these spaces aren’t always utilized to their maximum capacity as some private parking lots are often empty for 9 hours a day.

These factors bring lots of new opportunities for innovation and try to give more value, organization, and offer efficient utilization of the streets and parking lots. Here are a few solutions that already exist today:

Parkaze

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In the United States alone, drivers spend an average of 17 hours a year searching for parking spots with an estimated $345 cost per driver in wasted travel time and fuel emissions. This is the problem that Parkaze is trying to tackle, moving the space-as-a-service concept to private parking. This initiative allows the creation of a new revenue stream for parking spot owners, while not in use for a couple of hours every day, and provides further flexibility in the supply of such types of locations, across cities and neighborhoods.

Swiftmile

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Micro-mobility has disrupted the way we commute in urban areas. The micro-mobility sharing service providers have deployed thousands of vehicles in the cities that often cause a mess and frustration by blocking streets, parks and pathways. Swiftmile is on a mission to organize the chaos with docking and charging stations addressing the problem in the best way possible. Additionally, these docking stations can be used for advertising.

Grid

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Grid offers several solutions and services that aim to make cities more sustainable. One of their solutions is a new way to manage curbside space. With their platform you can book time-spliced curb slots for delivery preventing the delivery vans from circling around the block which will reduce congestion and emissions.

Space-as-a-Service for Storage

Material goods, products, and perishables need to be stored in close proximity to their end customer. Reports indicate that today we have more than double the number of goods produced and shipped than we did 50 years ago. In addition to this, there's also a growing urban population and increasing scarcity of affordable housing and storage. Thankfully, there are several companies tackling this and building solutions to better utilize the already limited space we have in urban environments. Here are a few examples:

Chunker

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Short-term rental has become a popular trend among Commercial Real Estate tenants. This practice is starting to be widely accepted by the office market, but is still underexploited when it comes to warehouses. This is where Chunker comes in. Identified as the "Airbnb for Warehouses", Chunker is one of the few companies offering flexibility and liquidity into the space. This is achieved by offering a platform on which space tenants and landlords can list their unused space, and where businesses in need of storage can rent for a short period of time. This is a handy tool for the new generation of warehouse brokers.

LuggageHero

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Having to drag luggage around while navigating a new city is a pain which was, until now, mostly solved by reserving a hotel or dropping belongings off at a friend's or family's house. LuggageHero's model offers a simple network of short-term luggage storage options in shops, cafes, hotels and more, allowing local businesses to create a new revenue stream and travelers to enjoy their journey without adding unnecessary burdens.

Minnowpod

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The current pandemic has changed a lot of things in our daily lives. One aspect is food delivery and pickup. While some food delivery providers have created a functionality to have your food be left at your doorstep to avoid human contact, with the growing demand of ordering food and goods it is still not sufficient. Minnowpod has developed a unique “locker for food” solution for both pickup and delivery therefore completely eliminating any human contact in the delivery process.

Space-as-a-Service for Well-Being

In a world where our well-being is being emphasized, new varieties of spaces and amenities are starting to appear both at home and at work thanks to the flexibility that resulted from the COVID-19 pandemic. Accordingly, this article is depicting three different ways for how individuals and real estate landlords can provide additional values to enhance their respective community's health and satisfaction through offering spaces fostering physical activities.

Sanctuary

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Today's density and speed are more important than ever and the moments or spaces which could allow for a complete disconnection or immersion into a more peaceful reality are rare. Sanctuary, as its name states, is a company that is eager to offer technology-enabled, fully automated, immersive wellness studios where guests experience virtual yoga, mediation, and other Sanctuary-developed wellness content.

Tulu.io

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Doing more with less is the essence of Tulu.io. While working from home is an integral part of daily life for a huge part of the population, space efficiency at home will become as crucial as ever. Tulu.io offers space for tenants' amenities allowing building residents to share on-demand access to the latest leading household items, ready to use a couple floors or doors away.

Earthworm

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In some regions around the world, urban gardening has gained significant momentum. The demand for having a small plot or garden to grow vegetables and herbs has been growing over the past years, particularly after the food supply scarcity which came along the first global Covid-19 lockdown. Several local initiatives started to provide unused lands in neighborhoods for gardening. Earthworm is offering one of the first privately-owned "Garden-as-a-Service" C2C solutions allowing the garden's owner to rent their garden to urban gardening enthusiasts in the region.

Conclusion

As technology and innovation become more accepted in the rather slow-moving real estate industry, the shift towards the space-as-a-service business model is rapidly increasing. Technology is paving the path for fundamental changes in business operations as well as the ways people work and live, and where they do it. The most important enablers for this transformation have been the adoption of high-speed connectivity, universal use of digital devices (such as smartphones), and the expansion of IoT - the adoption of artificial intelligence and robotization. Together these technological advancements and widespread adoption are re-shaping the way we as a society and workforce use and occupy space.

With the current pandemic and public measures taken to reduce urban commuting to a minimum, we believe the dynamics of our cities are changing and they are morphing into an urban reality we have never experienced before. The common uses throughout the urban landscape, such as central business districts, will slowly disappear to introduce a more mixed ecosystem merging living, working, leisure, and education at a smaller scale. In the long term, society may shift away from the City-as-a-Service concept to a more neighborhood-level Space-as-a-Service model. One of the cornerstones for us to successfully change the paradigm revolves around stakeholder buy-in and partnerships between landlords, institutions, local governments, service providers, and end-users which in theory would be beneficial, but in practice rather difficult to achieve.

Our aim at Plug and Play is to bring innovation to everyone, everywhere. Entrepreneurs no longer need a computer science or software development background to create solutions that solve our everyday challenges at a personal or professional level. It's more about adapting what already exists in a clever way to fulfill consumers' ever-changing and constantly evolving needs. In addition, behavioral changes will be key to mass adoption of disrupting solutions. However, this pandemic taught the world's economies that, just as Dr. Henry Cloud & Dr. John Townsend has once rightly said, we should embrace such change before the pain of staying the same becomes greater than the pain of changing.

In a world gradually moving towards a more global economy in an effort to becoming more resilient, the circular reuse of spaces for various use cases as discussed in this article, is an inspiring first step into triggering a more optimized approach to making our cities sustainably dense, livable and flexible by leveraging our existing infrastructure to create new concepts and use cases.


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