Co-working start-up WeWork might have landed itself in a fair load of trouble globally, but its Indian wing doesn’t expect any impact from its international troubles. In fact, WeWork India - which franchise is owned and operated by real estate major Embassy Group - is planning to raise as much as Rs 1,400 crore or USD 200 million by the end of the year to expand operations.
Speaking to reporters, WeWork India’s business head Karan Virwani and Embassy Group chairman and managing director Jitu Virwani both pointed out that despite WeWork’s deferment of its planned initial public offering (IPO) last month and the ousting of CEO and co-founder Adam Neumann, the India franchise would go ahead with its expansion as planned.
“We still believe in the WeWork brand and the India business is really growing well. Embassy Group is bullish about the co-working sector and we continue to expand,” said Karan Virwani. "Adam Neumann or no Adam Neumann, our business is here to stay," added Jitu Virwani.
The Bengaluru-based Embassy Group had partnered theUS-based co-working start-up WeWork in 2016. WeWork India is an independent entity with the right to execute its business in India and it pays a management fee to the American firm.
According to sources, the IPO deferment had resulted in a breakdown in talks where WeWork India had been planning to raise around USD 100 million. However, the company is now confident of raising the looked for USD 200 million by the year-end, from a clutch of investors that company officials say have already expressed interest. The company has already invested Rs 1,300 crore in the India business, including Rs 1,000 crore as equity.
The funds so raised will go into WeWork India’s expansion plans. The company currently has 26 operational coworking centres with a seating capacity of 46,000. There are nine centres in Bengaluru, 10 in Mumbai, six in Gurugram and one in Pune, with seats available at between Rs 5,000-40,000 per desk per month.
The company is now targeting an increase, with a goal of hitting 1,00,000 seats by end of the next year. WeWork India will also soon enter the Noida and Hyderabad office markets and has already taken on lease over 3 lakh sq ft office space in Noida to build three co-working centres. The company also aims to achieve profitability at the centre level before the next 12 months.
Funds raised will be used for expansion
According to sources, the IPO deferment had resulted in a breakdown in talks where WeWork India had been planning to raise around USD 100 million. However, the company is now confident of raising the looked for USD 200 million by the year-end, from a clutch of investors that company officials say have already expressed interes to fuel its expansion plans. The company currently has 26 operational co-working centres across the country