Co-working major WeWork India, which is owned by the Embassy Group, on Friday said it has raised USD 100 million from WeWork Global for sustainable growth of its business. With this funding, US-based WeWork Global has reaffirmed its commitment to the Indian market, it added.
"WeWork India - the global platform for creators that provides collaborative workplace solutions, will receive USD 100 million financing from WeWork Global to help boost sustainable growth," the co-working player said. Karan Virwani, CEO, WeWork India, said, "The fresh round of capital from our long-term partners at WeWork Global represents a vote of confidence in our strategy and will help us serve our community better."
Virwani pointed out that the flexible workspace industry in India and around the world is facing its biggest challenge yet.
"In that, we see a new opportunity that suits our members' evolving needs. This is driven by an acceleration towards variable real estate costs, the confidence of safe and well-managed workspaces for their employees, and the growth opportunities that are intrinsic to the WeWork community," he added. WeWork India said the coronavirus pandemic has accelerated the shift to flexible workspaces, with businesses of all sizes looking to manage cash flows effectively by moving costs to a variable model.
"Space as a service is a huge opportunity for them to free up cash, and WeWork has the right foundations and experience to provide safe, flexible workspaces," it added. WeWork India said it is looking to navigate this transformation by prioritising focused growth in the Indian market over the next 36 months.
The company further said it is already profitable and plays an important role in the global scheme of business for WeWork. Sandeep Mathrani, CEO of WeWork, said, "WeWork is excited to be providing financial assistance to transform the workspace environment in India." "WeWork India's financial performance has shown consistent growth, and with the fundamentals in place at a building level backed by the expertise of the Embassy Group, we believe the WeWork India business has the ability to be our growth vehicle and provide our members an exceptional experience," Mathrani said.
WeWork India offers seats in the range of Rs 5,000-40,000 per desk per month. WeWork entered into a partnership with Embassy Group in 2017 and started operations in the Indian market. Bengaluru-based Embassy Group, which holds 100 per cent rights over WeWork India, is a major player in the Indian commercial real estate market. It has also launched the country's first real estate investment trust (REIT). The co-working segment, which grew at a rapid pace in India in the last few years, has been badly impacted by the COVID-19 crisis.
Co-working players take office space on lease from real estate developers and other landlords and then sublease that to corporates, freelancers and startups. Since entering India, WeWork has been providing full service and innovative workspaces with over 60,000 desks in 34 locations, across six cities. Softbank-backed WeWork Global had dropped its plan to launch an IPO in September 2019. Early last year, its valuation had touched USD 47 billion, but it has plunged since then.
June 05, 2020