WeWork India plans to raise $200 million to expand the India business. As of now, WeWork India has 26 operational coworking centres with 46,000 seating capacity. The company is looking at increasing its capacity to one Lakh seats.
Bangalore-based Embassy Group holds the franchise rights to WeWork India and holds about 80% stake in the Indian operations.
US-based WeWork has been facing cash crunch in recent times considering its inability to go through its IPO and raise additional funds. To tide over the existing cash crunch and mounting losses, WeWork US has announced job cuts across its operations, and has put on hold some of its aggressive expansion plans. It is learnt, basis news reports, that WeWork may slash up to 2,000 jobs. However, for now, WeWork India, appears to be on its course, and is expanding as per its plans and mandate.
In his statement to the media last week, Jitu Virwani, chairman of Embassy Group said, “…It’s business as usual for WeWork India. Whatever has happened doesn’t impact the India business and we continue to believe in the brand. We have been building the business ourselves and co-working has helped our traditional commercial office business a lot.” As per Virwani, WeWork India centers are profitable on an individual basis, but it is yet to turn profitable at the company level.
One negative outcome of delay of WeWork’s global IPO, on the Indian entity, is going to be the uncertainty regarding valuation of the Indian entity. This could impact the fund raising process. Based on earlier projections, it was estimated that WeWork India could be valued at $ 2 billion by the end of 2020, however, with concerns on WeWork’s business model and valuation, this estimate could also take a hit.
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