Looking at the rapid expansion of co-working space and valuation boom in India, co-working space provider WeWork is planning to own a majority stake in the country’s operations.
At present, WeWork India is a joint venture between the New York-headquartered WeWork and Bengaluru-based real estate major Embassy Group, which is run by Jitu Virwani through a licensing deal, which ends in 2021.
The firm offers tech-enabled collaborative desks and offices to entrepreneurs, freelancers, startups, small businesses, and large corporates.
Virwani is scheduled to meet WeWork co-founder Adam Neumann next week to discuss the deal, which is pegged to be worth $1 billion, as per TOI report. It aims to have ownership of the business before valuations go to high.
Ever since WeWork entry in the country, the co-working provider has shown good growth. The share of co-working sector in total office leasing has more than doubled to nearly 10 per cent in 2018, as per JLL report.
WeWork entered the Indian market with the launch of WeWork Galaxy, a 2200 members co-working space, in Bengaluru in July 2017. The company has officially launched WeWork Labs in October last year.
Currently, WeWork India has 35k desks across 17 locations and aims to have around 90k by the year-end. Once it achieves its target, the platform would do gross revenue of around Rs 1,500 crore this calendar.
In India, it is competing against startups such as BHive, Innov8, Awfis, Innov8, 91Springboard and among others.
The move by WeWork to have majority stake is not surprising especially looking at co-working space rapid growth in recent years in India, said experts. The company has much to gain if it buys a majority stake in India unit, they added.
Meanwhile, the company’s main shareholder Softbank has reportedly shrunk a massive $16 billion commitment to $2 billion. Till date, Softbank has invested $10 billion.
Founded eight years ago, the firm claim to have a presence in 26 countries. The company claims to have 4 lakh members globally across 400 locations in over 99 cities. Last week, it announced that it would be now onwards called The We Company.